| Determining your readiness to buy a house comes | | | | downpayment so that you'll have more options when it |
| from having a deep understanding of what it means to | | | | comes to the kind of house you want to buy, as well |
| be qualified to buy a house and what it means to keep | | | | as to lower the monthly mortgage amortization. Your |
| on paying for it until the mortgage is all paid up. No | | | | savings should also be enough to pay for closing costs |
| matter how much other people convince you to buy a | | | | and other added costs that you may incur when you |
| house and take advantage of a local buyer's market, | | | | move and settle down in your new house. How's the |
| no matter how much you really want to own a house | | | | level of your savings? Are you confident that you've |
| and invest on real estate, the fact still remains that if | | | | saved enough? |
| the facts of your personal and financial situation are | | | | 3. Do you have a steady and reliable source of |
| not suitable for homeownership, it will be difficult to get | | | | income? - It's important to look at your financial status |
| approved for a loan, and even more difficult to keep | | | | in terms of potential over a long period of time |
| up with mortgage payments. If you're not sure how to | | | | because you'll be dealing with monthly mortgage |
| know whether you're ready or not, here's a short | | | | payments for several years to come. Are you |
| checklist which can show you where to start: | | | | currently gainfully employed and are enjoying a steady |
| 1. How is your debt to income ratio? - This is one of | | | | and reliable monthly income? Has your business been |
| the things lenders will first look at when determining if | | | | doing well for the past several years? Do you have |
| you're eligible for a loan. This will also give you a bird's | | | | any plans of making any major changes to your |
| eye view of whether you can afford to make | | | | career in the coming years? Apparent stability of |
| mortgage amortization payments. To calculate your | | | | livelihood is something very important to lenders as |
| debt to income ratio, take all of your debts which you | | | | well. |
| pay off every month (car loan monthly payment, other | | | | 4. Do you or your spouse have life insurance |
| mortgage payments, minimum amount due for all credit | | | | coverage? - Married couples enjoy dual incomes that |
| cards, student loan payments, and the likes). Add the | | | | may make mortgage payments more manageable. |
| total and divide this by your total monthly income. If | | | | Having a life insurance coverage would assure you |
| your debt to income ratio is more than the acceptable | | | | (and the lenders) that in the very unfortunate event |
| 33%, you probably won't get approved for a loan. | | | | that one of you dies, the other won't be left with |
| 2. How much money for downpayment have you | | | | unmanageable mortgage payments. |
| saved so far? - The years leading to your target year | | | | These are just some of the things you should ask |
| to buy a house should be spent saving money. The | | | | yourself when determining if you're ready to go into |
| major reason for saving should be for the | | | | home ownership. |