{"id":36848,"date":"2016-04-07T10:00:50","date_gmt":"2016-04-07T17:00:50","guid":{"rendered":"https:\/\/movinginsider.com\/?p=36848"},"modified":"2019-06-27T14:41:47","modified_gmt":"2019-06-27T21:41:47","slug":"buying-your-first-house-part-1","status":"publish","type":"post","link":"https:\/\/www.uhaul.com\/blog\/2016\/04\/07\/buying-your-first-house-part-1\/","title":{"rendered":"Buying your First House: Part 1"},"content":{"rendered":"

Buying your first house is a decision that should not be taken lightly. \u00a0I have been thinking about buying a home for some time and it is exciting! \u00a0That being said, it is also important to consider all the details and how your life will change. \u00a0Long before you ever see your first house there are things to consider and prepare. Getting your finances in order\u00a0is the first step in buying your first house. \u00a0You need to do this to make sure you are ready to buy a home based on your monthly expenses. \u00a0You also need to make sure that a lender will lend you the money unless you are ballin’ like that and do not need a lender. \u00a0Below are some things to check for to make sure you can make it to the next step.<\/p>\n

\"Buying<\/a>Create a Spending Plan<\/h3>\n

This helps prepare you financially to own a home by showing you fixed bills you have and can also help you determine adjustments to make so you can afford to buy a home. \u00a0This plan should be based on your goals and will be different for every household based on what is important for them. \u00a0For instance, for me, I know I can not give up my physical trainer as one of my goals is getting in shape. But, I can get rid of my makeup subscription and my DVD portion of Netflix. \u00a0I have not used this in ages. \u00a0Creating a spending plan can also help you find holes in your budget like my Netflix subscription. \u00a0Below is the order you should do this in.<\/p>\n

    \n
  1. \"Buying<\/a>Gather a month of pay stubs, recent bills (credit cards, car payment, student loans, utility bills, rent, cable TV, etc) and your bank statements.<\/li>\n
  2. Determine gross income and net income. Gross is the monthly income before taxes and health insurance deductions. \u00a0We want to use your net income for this. Lenders will use your gross income.<\/li>\n
  3. Do not include any income that is not for sure! \u00a0No overtime, commissions, bonuses or sporadic work.<\/li>\n
  4. Next, add\u00a0all the bills you are billed every month without any change in the payments. \u00a0These are fixed expenses<\/strong>. \u00a0Deduct the total from your net income.<\/li>\n
  5. Periodic expenses<\/strong> should be deducted next. \u00a0These are any bills that do not occur every month like your car registration.<\/li>\n
  6. Controllable or flexible expenses<\/strong> are bills you have some control over including cable, internet, food, clothing, hair care, and entertainment. \u00a0These should be deducted next. \u00a0This is the area you should take a really hard look to determine if you can decrease any expenses.<\/li>\n
  7. Consider the money you will take from your income to put in your savings account. \u00a0Having a healthy savings account when you own a home is also important.<\/li>\n<\/ol>\n

    \"Example<\/a><\/p>\n

    If the balance at the end of this exercise is $0 or negative, you may not be ready to buy a home. \u00a0Here is a spending plan worksheet<\/a> to help you with this exercise.<\/p>\n

    \"Buying<\/a>Pay Down Your Debt<\/h3>\n

    Lenders will not lend to you if you have judgments or items in collections. \u00a0Or maybe your debt ratio is off. \u00a0Lenders like to see a debt ratio of around 30%. \u00a0You may need to pay down some credit cards. \u00a0If you need to find space in your budget to pay down the debt, start a three-month spending journal that will track every penny you spend. \u00a0Find the holes in your budget that you can avoid by taking an honest look at how you spend. \u00a0Every bit you can pay towards your debt will help you reach your goals.<\/p>\n

    \"Buying<\/a>Save! Save! Save!<\/h3>\n

    Now that you have evaluated your spending you can see how you spend your money. \u00a0You will need to have money for closing costs and down payment. \u00a0If you do not have enough savings to accommodate this, go back into your spending plan and work in a more aggressive saving plan if possible. \u00a0This will help you to reach your home ownership goals quicker!<\/p>\n

    \"Buying<\/a>Find Financial Help<\/h3>\n

    If this is intimidating to you, find counsel that can help you prepare for the next step. \u00a0These are not all the same. \u00a0Ensure you use a non-profit or HUD-approved to get the best service and assistance.<\/p>\n