1. Enough money to make monthly mortgage payments....of course!! If a mortgage payment will blow your budget then don't say goodbye to your landlord yet! Have a mortgage broker work the numbers and figure out if you can afford it.
2. Enough income to pay property taxes and home owner's insurance. The mortgage isn't the only cost you will encounter every month. Be sure to take approximate property taxes and homeowners insurance into consideration when running the numbers.
3. The ability to maintain the property. It is important to keep a home in good condition and repair or it will lose it's value which means you will lose money. You can do the work or have someone do it for you. Either way, you can't ignore peeling paint or a leaking roof.
4. A decent credit record. If you have a record of many late payments, bankruptcy, or delinquency you may have a hard time obtaining a mortgage. If you are still able to do so, you may end up paying a higher interest rate which means a higher mortgage payment. Furthermore, never assume your credit is not good enough to obtain a mortgage without talking to a lender.
Contrary to popular belief, here is what you don't need to buy a home:
1. A big down payment. Of course it is a good idea to put a big chunk of your money down to avoid paying personal mortgage insurance and to keep your payments smaller, but you can still buy a house with very little down.
2. Experience. In most major cities, real estate companies hold first time home buyer seminars. Go even if you have no immediate plans to buy. The information you take from it can lead you to other sources of help and start you on that path to home ownership.
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