Buying a home is one of the largest financial decisions you’ll ever make, so you need to put a lot of thought into this choice before you commit. The team at RE/MAX Homes & Hills Realty have helped many new buyers in Black River Falls, WI, find their dream houses within their needs and budget. Here, they share a few tips about the various factors you must consider before you begin your search.
What to Consider Before Buying a Home
1. Your Credit History
In addition to your stable income and other assets, mortgage lenders will be looking at your entire credit history. A good score will earn you a better loan rate, which will save you many thousands of dollars over the years. The average minimum for people applying for conventional loans is 620, and your credit history is very important too. Know your debt to income ratio, and aim for 36%, including your new mortgage.
2. Your Price Range
A lender will qualify you for a loan, but you don’t necessarily want to purchase a home at that price level. Be prepared for the hidden fees in buying a house, such as closing costs and homeowners insurance. Also factor into the equation your other financial responsibilities, such as supporting your family. Use the debt-to-income ratio of 36% as a guideline to see what you can afford.
3. Factor in Additional Expenses
You’ll need regular maintenance for every part of the home, including landscaping and the plumbing and HVAC systems. You also need to prepare for disasters that require a big fix, such as flooding or a tree falling onto the roof. While it’s impossible to predict the precise cost, a common rule of thumb for a house in relatively good condition is that it will cost an average of 1% of the purchase price per year.
If you’re prepared, buying a home can be extremely rewarding, both financially and personally. Turn to RE/MAX Homes & Hills Realty to guide you through every step of the process and help you make a sound and lasting investment. Call (715) 284-0610 to speak with a friendly and knowledgeable representative today, or visit online to learn more about the services offered.