Are You Ready For Home Ownership?

Owning a home is the American Dream, but it comes with certain financial and emotional responsibilities that not everyone is ready for.

Some first-time homebuyers think that home ownership is like renting, but with the ability to have pets and paint the walls whatever color you like. While these are privileges afforded to homeowners, they come with increased responsibilities, such as house payments, insurance, taxes and the cost of home maintenance.

The first steps toward purchasing a home of your own starts long before you hop into the car and drive around seeking For Sale signs. These steps require you to take critical stock of your finances and your expectations.


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Questions for Prospective Homeowners

How much can you afford?

Working with a lender is the very first step to take to determine how much you can afford to spend on a home. Without this knowledge you’re just spinning your wheels, wasting your time and your real estate agent’s. Shopping for homes without knowing how much you can spend also sets you up for disappointment when you look at homes you can’t possibly afford: those that you can afford will pale in comparison.

Your lender will run some calculations, taking into account your income and your outgo. This gives her a baseline figure to which will be added interest, taxes and insurance to come up with a final figure that the bank is willing to loan you.

What is your debt-to-income ratio?

One of the most significant figures that the lender will look at is your debt-to-income ratio. Expressed as a percentage, most lenders want to see a debt-to-income ratio (DTI) of no more than 36 percent of your income.

Your debt includes your total monthly mortgage payment, child support, alimony, car loan payments, student loan payments credit card payments and payments on any other loans you may have.

To determine your ratio, add up your recurring monthly debt payments and divide the sum by your monthly before-tax income. Finally, multiply this number by 100.

If your DTI ratio is more than 36 percent start working on bringing it down. You can accomplish this by paying off debt and bringing down high balances.

Are you ready to buy?

Owning your own home means that you can’t pick up the phone and call your landlord when the roof leaks or the toilet backs up. You can pick up the phone to call a contractor but are you able to pay the bills?

Factor in maintenance costs when determining whether or not you can afford a home of your own. As a general rule, plan on setting aside 1 percent of the purchase price of the home each year for maintenance.

We Can Help

The Kris Lindahl team is committed to helping you find the right home, at the best price. From our initial meeting to determine what you want and feel you must have in a home to the moment you’re handed the keys to your new front door, we’ll be right beside you, helping you navigate the sometimes choppy home-buying waters.

Don't hesitate to contact us to find out more about how we can make buying your first home easy.

The data relating to real estate for sale on this site comes in part from the Broker Reciprocity program of the Regional Multiple Listing Service of Minnesota, Inc. Real Estate listings held by brokerage firms other than Kris Lindahl - Real Estate are marked with the Broker Reciprocity logo or the Broker Reciprocity house icon and detailed information about them includes the names of the listing brokers. Kris Lindahl - Real Estate is not a Multiple Listing Service MLS, nor does it offer MLS access. This website is a service of Kris Lindahl - Real Estate, a broker Participant of the Regional Multiple Listing Service of Minnesota, Inc.

Information deemed reliable but not guaranteed.

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Listing information last updated on July 22nd, 2018 at 1:20am CDT.