Are you a first time homebuyer? Are you thinking about buying that first home?  It's a scary thought but very exciting at the same time.  I teach the mortgage section of a first time home buyer class for Dakota County CDA called Homestretch and it's one question I ask the people attending.  Sometimes I will ask why people want to buy – it always seems to come down to a few reasons.  One is they want to own a home – they want their own space, a place to have a garden, rooms they can paint, etc.  They want a tax deduction.  They are tired of giving their money to their landlord and getting nothing out of it – or feeling like they are making money for the landlord and want to get that equity for themselves.  Whatever the reason is, you need to think about a few things to make sure you are making the right decision for yourself.

One thing to ask yourself – how long will you keep the home- are you planning to be in the same area for a while?  If you think you may move in a couple years – especially out of the area, it may not make sense to buy a home today.  If you think you will be in the same home for a longer period of time, it may be time to buy.  Remember an apartment lease is typically a year lease, a mortgage is usually a 30 yr mortgage.  A home may take time to sell so think about your plans before you buy.

Do you have a steady job?  Do you know if your income will continue?  Will you be able to make the monthly payments?  These are questions to ask yourself.  Your lender will need to be able to verify your income and make sure it will continue.  If you work part time or get laid off in the winter, you may want to wait to buy a home until your job is more steady.  

How is your credit?  Do you need to improve any areas on your credit report?  If so, talk to your lender and find out what makes sense for you.  Maybe you need to wait a bit and improve your credit score before you buy  a home.  Do you have debt to pay down? Is your score low?  If so, you may want to take care of some of the items on your credit report first.  The higher your score and the lower your monthly payments, the easier it will be for you to get into a home of your own- and be comfortable with the mortgage payments.

Do you have money for the down payment?  Do you have extra money set aside?  It always helps to have money in savings to help with emergencies.  Once you own your own home, you will be the one that is responsible for the repairs.  In an apartment, you can call the landlord and ask them to fix your furnace or water heater.  Once that home is yours, it's up you to fix the problem!  You need money for the down payment, but also for things like your insurance, utilities, taxes, maybe new applicances.  Do you want to redecorate the home? That can also cost money.  Try to set aside money every month for emergencies.   That way if something breaks you have money available to fix it. 

These are all questions to ask yourself before you decide to buy a home. Once you have made the decision to buy, meet with your lender and see what you can qualify for. Then you can meet with your realtor and go shopping!  It is a fun process but it can also be stressful. By being prepared, you can make the process easier!

Leslie Vanderwerf,  NMLS ID#335509, American Mortgage & Equity Consultants, Inc, An Equal Housing Lender, NMLS#150953 - Email - Website

About Leslie Vanderwerf

Currently a Branch Manager for American Mortgage and Equity Consultants, Inc., it's hard to believe I have been in the mortgage business for more than 25 years and have worked with Sharlene since 2000! I love sharing mortgage insights here each week and helping people finance their homes. Listening helps me find the right program for you!

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