Many people are beginning to think of the advantages about purchasing a home of their own. Consider several factors when making this decision and when actually going out to purchase:

How long will you plan to live in the home?
You must have some type of plan to live in the home for a considerable time for the purchase to be beneficial financially. If you purchase a home and then get a job transfer or decide to move after only a short time, you may end up paying money in order to sell it. The value of your home may not have appreciated enough to cover the costs that you paid to buy the home and the costs that it would take you to sell your home. You must be careful.

The length of time that it will take to cover those costs depends on various economic factors in the area of the home. Many parts of the country have an average of less than 5% appreciation per year. In this case, you should plan to stay in your home at least 3-4 years to cover buying and selling costs. If the area you buy your home in experiences an economic up turn, the length of the time to cover these costs could be shortened, but the opposite is also true.

How long will the home meet your needs?
What do you require in a home to satisfy your lifestyle now? Five years from now? Depending on how long you plan to stay in your home, you'll need to ensure the home has the amenities that you'll need. For example, a two-bedroom dwelling may be perfect for a young couple with no children. However, if they start a family, they could quickly outgrow the space. Therefore, they should consider a home with room to grow. Could the basement be turned into a den and extra bedrooms? Could the attic be turned into a master suite? Having an idea of what you'll need will help you find a home that will satisfy you for years to come.

Your financial health - credit and home affordability.
Is now the right time financially for you to buy a home? Would you rate your financial picture as healthy? Is your credit good? While you can always find a lender to lend you money, solid lenders are more skeptical if your credit history is not good. Generally, a few marks against you on a credit report may not affect you and may still make a good credit risk and you may qualify for low interest rates. However, If you have more than a few marks on your report, even if lenders will provide a loan, you may have to pay higher interest rate and fees.

Some believe that you should not borrow as much as you qualify for because it is wise not to stretch your boundaries financially. Another school of thought is that you should stretch to buy as much home as you can afford, because with regular pay raises and increased earning potential, a big payment today will seem like less of a payment tomorrow. This is a decision you must make. Are you in a position expecting to earn more money soon? Would you rather be conservative and fairly certain that you can make your payment without stretching financially? Do whatever is within your comfort zone.

To determine how much home you can afford, talk to a lender or go online and use a "home affordability" calculator or click on '2theMAX under RealCOOLinks at grodi2themax.com. Good calculators will give you a range of what you may qualify for. Call a lender, a mortgage broker or a bank. While some may say that the "32/40" rule applies, in today's home mortgage market, lenders are making loans customized to a particular person's situation. The "32/40" rule means that your monthly housing costs can't exceed 32 percent of your income and your total debt load can't exceed 40 percent of your total monthly income. Depending on your assets, credit history, job potential and other factors, lenders can push the ratios. It is important for you to know your options.

Where will the money for the transaction will come from?
Typically homebuyers will need money for a down payment and closing costs. However, with today's broad range of loan options, having a lot of money saved for a down payment is not always necessary - if you can prove that you are a good financial risk to a lender. If your credit isn't stellar but you have managed to save 10-20% for a down payment, you will still appear to be a very good financial risk to a lender.

The ongoing costs of home ownership.
Maintenance, improvements, taxes and insurance are all costs that are added to a monthly house payment. If you buy a condominium, townhouse or in certain communities, a monthly homeowner's association or condominium fee might be required. If these additional costs are a concern, you make choices. Be sure to make your realtor and lender aware of your desire to limit these costs.

If you are still unsure if you should buy a home after making these considerations, you may want to consult with an accountant or financial planner to help you assess how a home purchase fits into your overall financial goals. If you want to get started, call one of our HomeLife Real Estate Professionals TODAY!