9 Effective Steps to Buying a Home

June is National Home Ownership Month.  One of the happiest times in my life was when I became a homeowner.  I feel a great sense of accomplishment and have been blessed to remain in my home despite the economic woes of the country and many other homeowners. 

The best time to buy a home is during with fall and winter season when demand is low.  However, many Americans purchase homes during June, the start of the summer season.  Owning a home is one of the best ways to generate wealth.  However, owning a home requires financial discipline and sacrifice.  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 to help reduce the chances of filing for bankruptcy or foreclosure. 

Your monthly mortgage payment should be no more than 32-38% of your total monthly income.  This will ensure that you have extra cash to pay for unexpected expenses and will reduce the chances of using a credit card and going into debt. The advantages of owning a home are:  it increases your credit score, proves that you are a responsible spender, provides stability, provides a tax write-off, increases your financial worth, and provides you with an asset that will appreciate over time.

Renting should be a short-term option not a long-term solution.  Although becoming a homeowner may not be an option for everyone, owning something of value should.  You can:  become an entrepreneur, invest in a profitable business or purchase investment property.

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).  Start reducing your spending at least 3 months prior to looking for a home and use the money to save towards downpayment and closing costs and to save the difference between your current payment and your estimated mortgage payment.   Here are 8 tips to help you buy a home:

1.      Fix any errors on your credit and pay down debt

2.      Find a real estate agent

3.      Get pre-qualified

4.      Find the best loan

5.      Use home buying programs

6.      Find a home  and make an offer

7.      Get a home inspection, home energy audit, lead and radon tests

8.      Shop for homeowners insurance

9.      Prepare for settlement and closing and confirm in writing all dates, dollar amounts and what is needed from you