When you come to a point in life where you are ready to buy a home, there are many variables involved. Many decisions will need to be made as you look at the whole picture and make the best choices for you, your family, and your budget. Here are six areas to think about when it comes to buying a Fort Collins CO home.
1. You live with a budget: If you have a pretty good idea of what money is coming in and what is going out each month, these money management skills will be extremely helpful in owning a home. After all, there is more than just the monthly house payment to think about.
2. Your income is steady: Purchasing a home is a commitment, and you need to be sure that you will be able to afford your new home 5, 10, and 20 years from now.
3. You are making this decision because it is right for you: Buying a home because it is the “next step” in life is not a good enough reason. This decision should be made after careful thought and planning, and it needs to be the best choice not because you feel pressure, but because you really want to purchase a home.
4. You understand the costs: Beyond your monthly mortgage payment, you can expect an initial down payment, closing costs, insurance, taxes, utilities, maintenance and repair. It is important to be realistic in looking at the entire cost, not just the regular payments.
5.You have good credit: Mortgage lenders will look at the dollar amount you owe, how long you have owed, and the payment history of your credit lines. If you have multiple credit cards with late payments or over-the-limit balances, you may still be able to secure a mortgage, but it could cost you more. In addition, if collection agencies are pursuing you for late payments, or you have defaulted on a loan, it may limit your chances for a mortgage.
6. Your debt is under control: Mortgage lenders will want to make sure you will have enough each month to make payments on your home. Debt-to-income ratio is the amount of debt you currently have when compared to your income. To find your DTI, add up all of your monthly obligations, including loans, credit cards, and other recurring debt, and divide that number by your total gross income. In general, lenders will want you to have a low score.
Buying a home is an exciting time in life, full of dreams and possibility. As you move forward in the journey, make sure to do your research and always work with a professional realtor who can help guide you along in the process. The perfect home for you is out there, and by thinking about the six areas listed above, your experience can have a more positive outcome. Happy house hunting!