As with any major purchase, it pays to be informed prior to making any
decisions. As experienced buyers already know, buying a home is a
complicated process, so it's important to start at the beginning and
thoroughly understand each step. Whether you're buying your first home or
your third, make sure you have the necessary financial resources and have
explored all your options before you purchase a new home.
If you're a first-time buyer, you should weigh the pros and cons of
homeownership versus renting. There are many advantages and disadvantages
to consider. For example, renters have the freedom of mobility if they
choose to move, but their monthly rent checks do not establish long-term
equity or produce any other benefits. And while homeowners' mortgage
payments accumulate equity, these payments are generally higher than rent
payments and come with the responsibility to manage the care and upkeep of
Both new and experienced buyers have their own sets of financial
considerations when it comes to buying a home. Move-up buyers should
evaluate their financial situation to ensure they're prepared to meet the
higher mortgage payments involved with relocating. Likewise, first-time
buyers should determine if monthly mortgage payments fit in their budgets.
In addition, you'll need to be prepared to cover the downpayment and
closing costs. And, you should consider whether you meet the basic criteria
to qualify for a mortgage; lenders prefer that applicants offer a stable
job history and a good credit record.