You just came after a get together party at your friend’s house and now you are planning to buy your own home. Buying a home is a promising investment but it can go wrong without proper planning. If you are planning to become a homeowner this year, here are a few questions that you must answer upfront.

Can you rely on your income?

The most crucial question to ask yourself before taking the plunge into homeownership is your income. Can you rely on your current job for a regular stream of income? A job is reliable if you can make the same amount of income for at least next seven to ten years. It is not just about having sufficient money for the down payment. In the current economic conditions, it is must to have a safety net and a down payment can dry up your savings.

Are you expecting a family extension in the next five years?

You need to accommodate the housing requirements of your family, especially if you are planning to have children in the next couple of years. Do you need to support your parents in future? It is always best to buy a house with additional space or an extra bedroom, provided you can afford it.

How much money can you afford to put in?

You have to be honest about how much money you can afford. This is the time when you should get in touch with a financial planner and find out the amount you can afford. Keep in mind that the amount of loan that you can avail is not the correct measure of your purse. You are going to inherit several other expenses with your home including maintenance, HOA fees, and utility bills. Keep all of them under consideration and prepare a financial plan.

Are you ready to cut on your existing lifestyle?

While taking about changes in the lifestyle, people often overestimate the sacrifices that they are ready to make. If you are planning to cut on your current lifestyle, be realistic as these habits hardly go away. Some small changes in your lifestyle are possible but hoping for anything major is befooling yourself into a money trap.