This episode is part of our FINANCIAL FIERCENESS!™ series! This episode is, “How to buy your first (or next, or best) home!”
Many of us remember some discussion with a relative when we were teenagers wherein we were told, “This is my house! I make the rules. When you have your own house, you can make the rules!”
This show first explores the question of why we think we want to buy a home. Do we want a house because of the freedom of being able to decorate it anyway that we desire (purple polka-dots, etc.) and the ability to do what we want, when we want, how we want? Then, purchasing a home for ourselves may be a great choice to ensure that we are joyful in our lives! If we are not sure where we want to reside and we despise the idea of having to do maintenance, it may not be the right time for us to purchase a property.
Once you determine why you want to purchase a home, how do you buy it? If you pay cash for it, do not spend every single penny that you have. Always leave a cushion of extra money. Ensure that you negotiate the best possible price and do not let anyone know that you are in love with a property until you have closed on it (and it is yours). If you are borrowing money, again, do not spend every penny you have on the down payment and closing costs. Always leave yourself an extra cushion. Raise your credit score as high as you possibly can (low credit utilization, pay everything on time, etc.). Ensure that you understand how much of a payment you will comfortably be able to make on your income. Do not borrow the maximum amount that you are approved for. For most people (who do not have variable income or multiple income streams), fixed interest rates are best (versus ARMs).
Having the ability to shut out the rest of the world and create your own personal paradise in your own place is psychologically rewarding. Now, you are able to say to other people, “I make the rules!”
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