As has been said many times, buying a new home is likely the most expensive purchase you’ll ever make. With that in mind, getting yourself ready financially is extremely important. Here’s what you need to know, need to improve on and need to plan for before you buy:
KNOW…the full cost of buying and owning a home. Many homebuyers fret over the price of their new home—but don’t think about other costs. Although closing costs and other fees associated with a new mortgage can be rolled into the loan, you’ll still have to pay for them in the long run. Also, you’ll have plenty of other recurring costs. The list of expenses homeowners have to consider—beyond just the one-time cost of buying—is quite lengthy and may include regular maintenance, repairs big and small, homeowners’ association fees, general decorating and landscaping, and new tax considerations.
IMPROVE…your credit score and debt-to-income ratio. Your credit score can save you—or cost you—money when it comes to financing your home. Raising your score can take time, so start working on it as soon as possible. As for your debt-to-income ratio, you’ll want your front-end ratio—which is your monthly mortgage payment measured against your gross monthly income—to be less than 28 percent. Your back-end ratio—which is your monthly debts measured against your gross monthly income—should be less than 36 percent.
PLAN FOR…your future. Big life events may be a little difficult to plan for, but try to look into the future as much as you can before you buy a home. Having children, buying a new car, caring for aging parents, or putting aside money for retirement or college can all have a major impact on your finances, so do your best to balance those future needs with your current home purchase.
For more than 25 years, Omega Financial has been serving mortgage clients in Massachusetts. Our brokers have approximately 50 years in the mortgage business. You always will receive fast, courteous, and accurate information. Omega Financial, Inc. is a company duly licensed to operate in Massachusetts as a Mortgage Brokerage. We are located in the Town of Norwood, Massachusetts where we have been operating as Omega Financial Incorporated since 1988.
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