Owning a home is the dream of every person. However, most people cannot afford to buy a house with their own savings and need to have their purchase financed by a financial institution. A loan made by a financial institution to buy or renovate a house is known as home financing. Buying a home offers several advantages. Perhaps the biggest advantage is that it allows you to build home equity when you pay your mortgage each month.

It is a common myth that paying the monthly mortgage payments is much more expensive than paying the rent. Often the mortgage payments can be less than the rent. Unlike rent, which can increase every year or few years, mortgage payments are usually fixed throughout your tenure. Interest paid on a mortgage payment is tax deductible. Plus, you can take out a home equity loan at attractive interest rates and convert it into cash.

Before the idea of ​​buying a home, many questions and doubts arise. Questions one should think about include purchasing power and the monthly payment one can easily afford to purchase a home. These are the main criteria that must be taken into account. They help decide the budget for the purchase of a house and narrow the search for houses that fit the budget.

You must also consider other initial and ongoing costs. These include a down payment, closing costs, homeowner’s insurance, mortgage insurance, utilities, maintenance, and property taxes.

Before you begin the home shopping process, you should find out if you can get home financing and an estimate of what you prequalify from a lender. Getting prequalified is an indication to the real estate agent that you are a serious and knowledgeable buyer.