You’re borrowing hundreds of thousands of dollars in a process that you may know little to nothing about.
You might not even be quite sure where to begin. The first step to take once you’ve decided it’s time to buy a home is to figure out if you are both financially and emotionally ready for homeownership. Owning a home isn’t the same as renting, but with pet privileges. Sure, homeowners have more freedom to decorate and become pet owners if they like, but they also have far more responsibility, such as paying for insurance, taxes and maintaining the home.
Before you jump into the car to go look at available homes, take stock of your financial situation to understand if you’re really ready to own a home.
Ask yourself these questions
Kris Lindahl sells a home every two days. How? He’s an expert negotiator. Add to that his tenacious, all-in attitude and you’ve got a winning combination – a combination that will get you into the home you want at
the price you want to pay.
Expect Lindahl, and his team, to efficiently handle all the paperwork related to the sale. The team has an impressive network of related professionals as well, including title companies, lenders and home inspectors.
We know that when you commit to using our team to represent you in the purchase of your home you’ve placed a great deal of trust in us. Rest assured that we take that trust seriously and will do our utmost to meet and exceed your expectations.
1. How much can I afford?
The only way to truly determine how much you can afford to spend on a house is to visit a lender and apply for a mortgage pre-approval. The lender will determine how much you can borrow, based on your income and your credit history. The figure you’re given isn’t set in stone – you can always buy a less expensive home. Only you know your comfort level with monthly payments, so don’t be tempted to overspend just because the lender will allow you to borrow a larger amount.
Total Loan Amount
Total Interest Paid
Principal and Interest
2. What is my debt-to-income ratio?
It sounds complicated, doesn’t it? Your debt-to-income ratio (DTI) is a calculation, the result of which the lender uses to determine if you can afford a home. Your overall debt should not be more than 43 percent of your gross monthly income (the “back-end” ratio), and your housing debt should not be more than 31 percent (the “front-end” ratio) if you are hoping to get an FHA-backed mortgage. The Veterans Administration uses only one ratio, 41 percent. The USDA home loan requires DTI ratios of 29 percent (front-end) and 41 percent (backend). The USDA will allow higher ratios but you’ll need to have a minimum credit score of 680.
Team Lindahl Can Help
Unless you’re a real estate lawyer, you’ll need professional representation when you purchase a home. When you put the Kris Lindahl Team to work when you buy your first Minnesota home, you can rest assured that we will listen to you, that we won’t waste your time and that you’ll end up with the home that is just right for you.
From the first interview that determines your requirements to the moment that you receive the keys, trust the Lindahl Team to help you with the complicated process of buying a home. Don’t hesitate to contact us to
find out more about how we can make the home buying process easier!