You have been dreaming of buying your own home. You have your finances in perfect order. You have a good steady job and you are planning on living in the home long term. According to television, all you have to do is visit three homes, decide which big expensive house you want and somehow, all of the details will magically work themselves out between commercials. Right? Wrong!
Buying your first home is hard work and requires patience and determination. When buying a home, nothing ever goes smoothly. There are always road bumps along the way and you need to be prepared to deal with them. You need to be a realistic homebuyer.
Being realistic means knowing that the home inspection could show that the roof will need replacement or that your lender needs more documents or clarification on the information that you did submit. Be prepared to have your personal finances picked apart under a magnifying glass. You will need to explain anything that your lender doesn’t like on your credit report. Do you remember being late on your rent two years ago because you needed to take your son to the emergency room? Your credit report hasn’t forgotten.
Being realistic also means buying a home that you can afford. Just because a bank is willing to lend you $180,000 to buy a house does not mean that you can really only afford to live in a $125,000 home.
When lenders look at your finances, they are considering your current income, credit history, and debt balances and payments. Remember those DTI ratios that we discussed in Part Three of this series? They are not looking at other expenses that might be very important to you. For example, the lender does not weigh the fact you are planning to go back to college to earn your masters degree. With more college debt in your future, buying the less expensive home might be a better choice for you.
How can you get real about buying a home?
If you are not ready to handle the problems that will arise in the homebuying process, you are not prepared to handle the real world issues that come with owning a house. The HomeOwnership Center’s First-Time Homebuyers Class can make you better prepared to have realistic expectations when buying your first home.
Call us at 937.853.1600 or visit our Homebuyer page to learn how we can help you buy your first home.
This is the fifth post in the series, Are You Ready to Buy Your Own Home? You can read the other installments in the series by following these links:
Part One: Is Your Credit History Good Enough to Buy a Home?
Part Two: Have You Saved Enough Money to Buy a Home?
Part Three: Are You Mortgage Ready?
Part Four: Are You Planning to Stay in the Home for the Next 5 to 7 Years?
Part Five: Are You a Realistic Homebuyer?
Part Six: Do You Know Enough About the Homebuying Process?