Assess your financial situation before buying a house
Before starting your home search, it’s crucial to understand your financial health. Evaluating your income, savings, and existing debts ensures you can comfortably afford a new home. Here's a concise guide to help you assess your financial situation:
Evaluate Your Income
- Calculate Gross Income: Include salary, bonuses, freelance work, and other earnings.
- Determine Net Income: Subtract expenes and other deductions from your gross income.
- Assess Stability: Consider the consistency of your income for mortgage approval.
Review Your Savings
- Check Savings Accounts: Evaluate balances, including emergency funds.
- Calculate Downpayment: Ensure you have at least 20% of the home’s price saved.
- Factor Additional Costs: Include closing costs (2%-5% of the purchase price), moving expenses, and initial repairs.
Assess Your Debts
- List Debts: Include credit cards, student loans, car loans, etc.
- Calculate Debt-to-Income Ratio: Aim for a DTI below 36%
- Review Payment History: Ensure timely debt payments to positively impact your credit score.
Check Your Credit Score
- Obtain Credit Report: Get reports from credit bureau of Bank of Albania.
- Improve Your Score: Pay down debts, make timely payments.
Create a Budget
- Track Expenses: List all monthly expenses.
- Identify Discretionary Spending: Cut back to save more.
- Set a Home-Buying Budget: Determine a comfortable price range based on your financial situation.
Buying your first home
A housing Loan at Raiffeisen Bank Albania offers below mentioned benefits:
- Up to 100% financing of the Purchase Price
- Competitive interests
- High loan tenor
- No guarantor required
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