• Thursday, February 29, 2024
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Go for a home you can afford, consider your income


It is most likely that majority of people will live in their family homes or with relatives first, after graduation from school and securing a job before they think moving out to leave on their own apartment.

The first mistake most people in this category make according to findings is moving out of the family or relatives house to secure apartments that would be higher that their income.

If your two months take home pay put together cannot pay for your annual rent, then you are leaving above your income if you decide to take such apartment, says expert.

This is because; beyond payment for rent you have other obligations to meet which you cannot compromise for only house rent. So, it’s most advisable that you look for apartment that would be affordable and also allow you plan for other things.

According to financial tips, an online financial adviser, go for a house that you can actually afford. Consider your income, obligations and other factors when looking for a home to buy or rent.

While we think that renting a home is not a bad option because it is the easiest way to start, it is only going to be for a while. The best option will be to start saving to buy or build your own house, while you are on rent.

If you are able to do this, you would have saved yourself from a life time trouble of having to be indebted all the time.

Experts from Practical Money Skills reviewing the situation says,  turtles and snails are born with their homes on their backs. You, however, are not so lucky. Unless you plan to live in a cardboard box or you can talk someone into allowing you to live with them for the rest of your life, you will probably need to either buy or rent housing.

There are also substantial financial advantages to owning a home. The part of your monthly payment that goes toward the principal is all equity and the part that goes toward interest is tax deductible. Compare that with paying rent, which is neither an investment nor a tax write-off.

As your equity increases with time (and payments) it will be a source of financial stability for you, giving you collateral for a loan or producing a large sum of money if you sell.

To own or not to own

Home ownership isn’t for everyone anyway. It’s definitely a long-term commitment. The prices of homes increase over the years, but usually at a slow rate. With all the financing, closing costs and other expenses associated with owning a home, you’ll probably lose money if you sell in less than five years.

Everything from cutting the grass to putting on a new roof is your responsibility. The costs can really add up. Then add taxes, water and sewer bills and other expenses and you can get into some sizable payments.

But when you take full financial and maintenance responsibility for a home, it’s yours to do what you please. Paint the walls purple. Add a planetarium. Put in a fireman’s pole. You’re in charge.

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