Money Basics

Can I afford a house?

Instead of renting, you may want to consider buying a house. It's a good investment in the long term. Instead of paying a landlord, you are building up equity in your own property.

Before you jump into buying a house, ask yourself:

• Can I manage a budget?
• Do I have a good credit history?
• Do I have few debts?
  
  

If you answered "no" to any of these questions, you may need to get your finances in order before you begin your house search.

• Pay off debts.
• Don't incur any new debt. Mortgages are based on debt-to-income ratios—what you spend monthly vs. what you bring in. Taking on hefty new debt would throw the ratios off.
• If you are not already on one, get on a budget and follow it. Start putting money aside for a home purchase.
• When you are ready, consult a financial institution for a possible home loan.