Buying a home, just like getting married and having children, are considered key milestones in life that many people feel under pressure to meet before a certain age. However, they are all decisions that should not be taken lightly: A person needs to make sure that they are ready for the change of lifestyle and responsibility before they commit.
If you and your partner are considering buying your first house together, you should make sure that you are doing it for the right reasons. Rushing into the process because you simply want the satisfaction of having bought a home could mean that you are not prepared, and the venture could be costly, a poor investment and simply a headache to deal with. The following is an overview of things that you should consider before you take action to begin the process of buying a house.
Consider your debt-to-income ratio
Your income should be a large factor in how much you borrow to help pay for the purchase. The Federal Housing Administration suggests that a 43% debt-to-income (DTI) ratio standard is followed when approving mortgages. This means that all of your housing-related expenses, from homeowners association fees and mortgage payments to insurance and property tax, should never exceed 43% of your monthly income.
Make sure that you have savings left over after the down payment
It’s common for many couples to save for their down payment for years, and once they hit their target, they buy a home immediately. However, when they fail to put aside savings so that they have an emergency fund for repairs, and so that they have enough money to decorate and renovate, they can find themselves in a difficult situation. Therefore, it’s important that you save more than you think you need.
If you are considering buying your first home, you should equip yourself with knowledge about all aspects of the process.