June is National Home Ownership Month. When owning a home you need to create a budget or spending plan to help manage your finances to make sure you can stay in your home for as long as you like and reduce the chances of filling for bankruptcy or foreclosure.
Your mortgage payment should be no more than 38% of your total monthly income. This will ensure that you do not live above your means and have extra cash to pay for unexpected expenses and reduce the chances of using a credit card and going into debt.
Before you buy a home you need to prepare for the home buying process. Estimate your monthly mortgage payment. Subtract the difference of the estimated monthly mortgage payment and your current rent (if you pay rent). The advantages of renting are:
1. No costs associated with maintenance except for condos
2. Easier to maintain
3. Reduced financial responsibility
The disadvantages of renting are:
1. No tax benefits
2. No equity
3. No say in rental increases
Here are 6 tips to help you buy a home.
1. Find the best loan
2. Use home buying programs
3. Find a home and make an offer
4. Get a home inspection
5. Shop for homeowners insurance
6. Prepare for settlement and closing
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