Questions to Ask Yourself When Buying Your First Home
As you’re going through the entire buying process, there are some questions you should be asking yourself and keeping in mind.
Am I ready to buy a home?
Owning a home isn’t just about having the freedom to put holes in the walls or paint the walls whatever colors you like; it’s a serious commitment. Chances are you’re going to live in the home for years, so you’ll need to be ready for repairs and maintenance over time. Owning a home is about being prepared of the risks with a realistic idea of the rewards.
How much can I afford?
Knowing and accepting your budget can make you more confident while house hunting. Although it would be great to own your “dream home,” it might not be the smartest financial decision at this point in your life. It’s better to buy a home you can afford comfortably instead of worrying about paying the mortgage on a house that you can’t afford.
You should feel proud to own a home, but using all your income just to pay the mortgage can leave you feeling stuck.
What is my debt-to-income ratio?
You may not realize it, but this ratio is one lenders take very seriously. The ratio essentially shows how much of your income is being used to pay off all your debts.
Your debts includes any rent, alimony, child support, student, auto, credit card, and any other loans that you may have. Debt generally doesn’t include other things like groceries, utilities, gas, or taxes. Compare all your debts to your monthly gross (before taxes) income and see what the ratio is.
You want this ratio to be low, the lower your debt-to-income ratio then the less risky of an investment you are to potential lenders. A good ratio to shoot for is below 40%, but even that may be too high for some lenders.
Am I just thinking about today?
Are you just focused on today and not thinking about the future? If the answer is yes, then you may need to rethink buying a home.
You need to think about how this home will impact your future and if you’ll still be happy with your decision in years to come. Where your life will be in the future will impact how you feel about your home.
Still unsure about buying your first home? Fill out a request to get our complete buyer’s guide and learn how our team at Better Homes and Gardens Real Estate Kansas City Homes can help you.