Which factors matter most when buying a house?

You’re thinking about buying a house? That’s awesome. Home ownership is one of the best ways to build equity to use towards your long term goals and keep a roof over your head.

If you’ve spent time renting, you’ve probably been paying off someone else’s mortgage. Why not start paying off your own mortgage? Keep in mind that every situation is unique, but you may want to consider switching from renting to buying a home if it suits your finances.

The good news is that the team at Owning can help make your dream of home ownership a reality. Continue reading to learn if you’re ready to move from renting to buying or which factors a mortgage lender will likely look at. You can also start the process now by applying for a mortgage pre-approval.

How do I know if I’m ready to STOP renting & buy a house?

Deciding if you’re ready to transition from renting to buying a house involves considering various factors. Here are some indicators that you might be ready for homeownership:

1. Money Talks:

If your financial game is strong – stable income, a decent credit score, and manageable debts – you’re laying down a solid foundation for homeownership.

2. Piggy Bank Goals:

Got some dollars stashed away for a down payment? That’s like the golden ticket to the homeownership party, showing you’re financially savvy and ready to dive in.

3. Job Steadiness:

A steady job history is like music to a lender’s ears. Consistent employment is a green light when you’re looking to snag that mortgage.

4. Long-Haul Plans:

If you’re in it for the long haul in your current location, buying a home starts making more sense. It’s like setting up camp and saying, “I’m here to stay.”

5. Emergency Backup:

An emergency fund is your superhero cape. It swoops in when unexpected homeowner expenses come knocking, like that leaky roof or a wonky water heater.

6. Market Vibes:

Knowing the local real estate scene is like having insider info. Being savvy about property values and market trends helps you make smart home-buying moves.

7. Life on Cruise Control:

Having a stable life and future plans means you’re ready for the long-term commitment of owning a home.

8. Budget Boss:

Crunching the numbers and ensuring you can comfortably handle the mortgage, property taxes, insurance, and maintenance costs is key. It’s like making sure your budget is ready for the homeownership stage.

9. DIY Dreams:

Owning a home allows you to make your space your own and make changes to the structure. It is like having a blank canvas for your creativity.

10. Future Gazing:

Considering the future, like having kids or changing jobs, helps you choose a home that matches your long-term plans.

Before taking the plunge, having a chat with a financial advisor and a real estate pro is like having your expert guides on this homeownership adventure. They’ll help make sure you’re all set for this exciting next step.

Why do I need to know my debt-to-income ratio?

Knowing your debt-to-income ratio (DTI) is crucial because it provides a clear picture of your financial health and helps lenders assess your ability to manage additional debt, such as a mortgage. Here’s why understanding your DTI is important:

1. Loan Chances:

Think of your DTI as your golden ticket to loan approval. Lenders peek at it to figure out if you’re a low-risk borrower, making it more likely to snag loans with sweet terms.

2. Financial Checkup:

Your DTI spills the beans on how much of your paycheck plays hide-and-seek with debts. A high DTI might hint at financial stress, while a lower one shows you’re rocking those money skills.

3. Budget Buddy:

Calculating your DTI is like giving your budget a superhero sidekick. It helps you see where your money is going and makes planning and budgeting a whole lot smarter.

4. Mortgage Green Light:

When you’re eyeing that dream home, lenders often check your DTI. Knowing your mortgage approval odds in advance is like having a cheat code. It allows you to make adjustments if necessary.

5. Interest Rate Insights:

Your DTI isn’t just a number; it’s a potential influencer of interest rates. A lower DTI might score you better rates, saving you some hard-earned cash over the life of your loan.

6. Debt Game Plan:

Understanding your DTI is like having a game plan for your debts. It nudges you to think about managing debts wisely and might spark ideas on how to make your financial ship sail smoother.

7. Future-Focused:

As you dream about big financial moves like buying a house, your DTI is your crystal ball. It gives you a preview of your future financial situation. This helps you figure out how much debt you can handle without causing instability.

So, whether you’re eyeing a mortgage, want to fine-tune your budget, or plan for a debt-smart future, your DTI is your trusty companion in this financial journey.

How much of a down payment do I need to buy a home?

Let’s talk down payments for your dream home. The deal is, it depends on the type of mortgage you’re eyeing. If you’re thinking about a conventional mortgage, you may want to consider down payment options that range from 3% to 20%. But here’s the pro tip – aiming for that 20% down payment option can save you from coughing up extra for private mortgage insurance (PMI).

Just keep in mind, the larger your down payment, the sweeter the perks – lower monthly payments and potential mortgage rate wins. So, chat up with mortgage experts, explore your options, and find the down payment that fits your home-buying groove.

What kind of home should I buy?

Alright, let’s talk first-time homebuying vibes.

Picture this: a home that feels just right for you. Start with what fits your wallet – find a cozy place that doesn’t break the bank. Location is key – think about work, schools, and the vibe of the neighborhood. And hey, check out spots with potential for a glow-up in the future.

Now, size matters, but not just for today. Imagine how it fits your future plans – maybe a growing family or a furry friend. Check the home’s vibe – move-in ready is a win for a first-timer. And let’s not forget resale potential – it’s like setting yourself up for a future high-five.

Watch out for extra costs – property taxes, HOA fees, and the like. Be savvy with mortgage options – some sweet deals for first-timers might be just what you need. And here’s a pro tip: get a home inspection. It’s like giving your potential home a health check before committing.

Lastly, keep it real with your budget. Don’t let yourself get swept away – find a balance that’s comfy on your wallet. Your first home is a mix of cozy living and a smart investment. Also, get in touch with a mortgage pro to make sure you’re on the right track.

How can I start the process for buying a house?

Do you think you’re ready to start your journey to a new home? A common first step for first-time homebuyers is to get a mortgage pre-approval.

When you get pre-approved for a mortgage, it provides an idea of how much you can expect to get approved for. It also shows that you’ve put in some time and effort and are ready to get serious about owning a home. Sellers and real estate agents will both expect you to have a mortgage pre-approval if you’re going to get a mortgage.

Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply, contact Owning for current rates and for more information.

All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Owning, Inc. does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Owning, Inc. Owning, Inc. its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action. Owning does not provide tax advice. Please contact your tax adviser for any tax related questions.