Self-Check before Owning a New House or New Car
If you’ve reached a point in your life wherein you’re now thinking of investing in a major purchase such as a house or a car, there are many factors that you should consider. One question that will surely cross your mind is “Am I really ready to buy my own car or my dream home?”. To help you answer that, here are some tips to know that you’re ready to invest in a major purchase:
Cleared Debts
Make sure to evaluate your expenses and update your budget. Planning to buy a house or car can cost you more than you think. Down payment and mortgage are just some of the things that you need to pay so it’s important that you have more than enough cash flow in your savings. Be mindful that having big investments such as a car and a house can result in extra expenses that will surely cost a lot of money especially if you are still paying other debts.
Good Credit Standing
You will have a good credit standing if you never miss any of your payment dues. If you have a credit card or existing loans, keep track of your regular payments to assure banks and lenders that you are a good credit risk. If you missed some payments, catch up right away to lessen its negative impact to your credit standing. Maintain a good credit behavior so you can take advantage of loans.
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Cleared Debts
Make sure to evaluate your expenses and update your budget. Planning to buy a house or car can cost you more than you think. Down payment and mortgage are just some of the things that you need to pay so it’s important that you have more than enough cash flow in your savings. Be mindful that having big investments such as a car and a house can result in extra expenses that will surely cost a lot of money especially if you are still paying other debts.
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Good Credit Standing
You will have a good credit standing if you never miss any of your payment dues. If you have a credit card or existing loans, keep track of your regular payments to assure banks and lenders that you are a good credit risk. If you missed some payments, catch up right away to lessen its negative impact to your credit standing. Maintain a good credit behavior so you can take advantage of loans.
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Stable Income
Make sure to have a steady source of income before buying a new home or a new car. You don’t want to put a large percentage of your income to payments and compromise other needs that you normally include in your budget. An extra source of income will also keep you secured and help you minimize any financial risks.
Enough Savings and Emergency Funds
Save enough for the downpayment of your home or car and set some money aside for an emergency fund too. You don’t want to rely solely on your monthly income to cover unexpected costs on top of loan payments, mortgages and other bills. A good rule of thumb is to have the equivalent of at least one year’s worth of bills and payments.
Stable Income
Make sure to have a steady source of income before buying a new home or a new car. You don’t want to put a large percentage of your income to payments and compromise other needs that you normally include in your budget. An extra source of income will also keep you secured and help you minimize any financial risks.
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Enough Savings and Emergency Funds
Save enough for the downpayment of your home or car and set some money aside for an emergency fund too. You don’t want to rely solely on your monthly income to cover unexpected costs on top of loan payments, mortgages and other bills. A good rule of thumb is to have the equivalent of at least one year’s worth of bills and payments.
Know what you can afford
While you may be able to pay for the monthly payment, there are other fees to consider like taxes and insurance. There are a lot of resources online to help you decide what you can afford in terms of loans and house or auto prices. Use a home or auto loan calculator to determine if you can really afford all the costs before you even shop for a car or a home.
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We hope this guide helped you assess whether you are ready to make a major purchase or not. If you’re ready, make sure to enjoy the fruits of your hard work. If not, don’t fret–and focus on the things that you can work on so you will be able to fulfill that goal!