If you are working hard but living in a rented home, it means that you are building your landlord’s equity and not yours. This is why you should consider buying your first home. You can do this by staying focused on your goal and partnering with Team Couch who will help you identify your neighboring homes for sale.  This article looks at some of the things you should do when planning to buy a home.

Things To Consider When Buying Your First Home

If you’re buying your first home, being prepared emotionally and financially is important.  It will help you own a home quickly, despite the many challenges and responsibilities that come with buying a home. At Team Couch, we shall help you find a home that is affordable and matches your needs. We will sit down with you and look at the following questions to help determine if you are ready to own your own home or if the time isn’t quite right.

1. Do Your Finances Allow for This Kind of An Investment?

Buying a home is one of the big life investments that require a financial commitment. You need to have enough money available for your down payment. Most financiers will want you to have between 5% and 7% of the cost of your dream home. In addition, you should be prepared to pay another 3% to 6% for the closing costs. The exact figure will vary depending on where you live and taxes you are required to pay.  Also, if your down payment is less than 20%, you may be required to pay private mortgage insurance which ranges from about $50 to $200 per month.

2. Is your Credit History Good?

A healthy credit history is important. You need a minimum score of 620 to qualify for a mortgage. If your credit score is above 700, it will help you access mortgages at competitive rates. Most young adults face numerous hurdles including paying for their student loan debt. Mortgage companies are interested in the borrower’s debt-to-income ratio. They want the borrower to have a certain level of cash flow each month, and thus, what you pay out to other lenders determines whether the dream of buying your first home can come true or not. When you divide the amount you pay out as debt by your gross monthly income, it should fall below 36%. A debt to income ratio that is below 43% shows that the borrower can pay the debt.  If your ratio is more than 43 %, it may require that you work hard to improve on it.  The best way to go about this is to start paying off unsecured debts such as personal and credit cards loans.

3. Are You Prepared to Make A Compromise?

After working out on your credit history, you must be prepared to make adjustments just in case you get priced out of your dream home. If you wanted a single-family unit in a great neighborhood, but your finances cannot allow you to buy it, you should be able to make a compromise. Think about looking for a similar home that may need a little TLC. At Team Couch, we have access to many homes for sale and can find the perfect home for you.

4. Are you Emotionally Prepared?

When hunting for a home, it is important that you prepare yourself emotionally. You must be prepared to repair the toilet when it breaks, pay taxes, and all the other things that come along with owning a home versus renting. This means that you should have the financial flexibility to help you cover and cater for unexpected needs. You should be prepared to solve numerous problems and manage the stress associated with owning a home.

5. What are The Benefits of Owning a Home?

In some cases, you will find it cheaper to pay a mortgage than rent a home. This is good because it helps you to build your own equity rather than lining your landlord’s pockets. When you talk to us we shall help you choose a home that will help you kill two birds with one stone: living in your own house and building your equity.

6. What About Your Lifestyle?

When you are living alone, it may be cost effective to rent. However, when you start a family, you may require extra rooms, and so it becomes expensive to rent.  You need a home with a yard that can be used as a playing ground by your kids and pets.  As a leading Desoto County Realty group, we shall help you find a place that is welcoming for kids and pets.

7. Checkout Government Options

There are several programs offered by the U.S department of housing and urban development, which are meant to assist in closing costs and down payments. These options are available to people who meet certain location and income requirements. Law enforcement officers, teachers, EMT and firefighters may qualify for special lending programs. Desoto County has areas designated by congress to give citizens an opportunity to own a home at discounted rates.  You may want to speak with your mortgage lender about more information on available options.

8. Employer Assisted Housing Programs

These are programs that are meant to connect low and moderate income workers with down payment help. Check if you are eligible to apply for a down payment and closing cost assistance. Also, there are many programs in DeSoto County that offer down payment assistance to the residents.  Banks offer interest-free down payment loans and grants to first-time home buyers. Other organizations, such as Wells Fargo, aid home buyers especially in areas that have been hit hard by the housing market economic crisis.  Alternatively, one can get assistance from Workforce Initiative Subsidy for Homeowners program (WISH) and Individual Development and Empowerment Account (IDEA) programs, which are offered by the Federal Home Loan bank. The programs grant homeowners $3 for every $1 saved to be used for closing costs and down payment.  You’ll need to discuss these options with your lender.

In conclusion, it is important that you consider these items before buying your first home because it is one of the most rewarding investment options you can ever make.

Team Couch