Figure Out if You’re Ready to Buy Your First Home

Don’t rush into buying a home unless you’re sure that you’re ready. Here are some things you should do to prepare.

Get Your Finances in Order

Your debt-to-income ratio can affect your ability to qualify for a mortgage. Credit card debt and auto or student loans can also make it difficult to afford monthly mortgage payments. You don’t necessarily have to be debt-free before you buy a house, but you don’t want to get in over your head. It may be a good idea to wait a year, or two, or five to pay down your other debts so you can buy a house you can comfortably afford.

Your credit score will affect your ability to qualify for a mortgage and the interest rate on the loan. If your score is low or marginal, raise it by making payments on time and reducing your credit card balances.

Save Enough for a Down Payment and Other Costs

You may be able to get a house in Munson Township with a low down payment, but you will have to pay for private mortgage insurance if you put down less than 20 percent. That may add hundreds of dollars per month to your overall cost of homeownership. A larger down payment can help you avoid PMI and lower your monthly mortgage payments.

You will need money for closing costs, moving expenses, furniture, and appliances. Be sure to have funds set aside for maintenance and repairs.

Figure Out How Much You Can Really Afford

The amount a lender preapproved you for is not the amount you should spend. That estimate may not consider all the costs of homeownership or some of your other expenses, such as childcare, or your savings for retirement and for your children’s college education.

Think About How Your Life May Change

Consider how secure your job is and whether you have a large enough emergency fund. Think about possible changes that may occur in the coming years. For example, you may have one or more children, your kids may go to college or you may start a new job. Those changes may cause your monthly expenses to rise significantly. Ask yourself if you would still be able to afford a mortgage.

Consider How Long You Plan to Stay Put

Think of buying a home located in Richmond as a long-term investment. You don’t have to stay there forever, but it may not make sense to buy a house if you don’t plan to live there for at least five years or so. If you sell too quickly, you may barely make enough to cover the amount you paid on closing costs and break even. You may even lose money.

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Joseph A. Zingales is a Broker in the State of Ohio, a Broker in the State of Florida, the Principal of The Zingales Team and has been a licensed Real Estate Agent since January 1998.

Licensed/Certified: Broker, Realtor®, Appraiser, and Home Stager

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