Are you ready to buy your first home in Albuquerque? That may seem like an odd question to ask in these difficult times. But as circumstances change, so do our opportunities. One of the current opportunites that has arisen are record-low interest rates for home mortgages. This has given people the buying power they need to get into their first home.
If you’ve been thinking about taking advantage of this opportunity to own your first home, here are some thing to consider to help you decide if you’re ready.
Do you have job security?
No one can really predict how this pandemic will affect the economy or jobs in the long run. But if you are in a profession that has some level of job security and you’re currently in a rental, you might want to consider making a move. And if you have money in savings, that makes an even stronger case for you making a home purchase in Albuquerque.
Do the numbers make sense?
Youe debt-to-income ratio is used by lenders to determine of you can really afford to buy a home. The FHA uses 43% debt-to-income ratio as a guideline for lenders. This ratio may vary with lenders. This ratio means that if the ratios is 43%, then all your regular debt payments, plus your housing-related expenses—mortgage, mortgage insurance, homeowner’s association fees, property tax, homeowner’s insurance, etc.—shouldn’t equal more than 43% of your monthly gross income.
This ratio still does not cover every cost of owning a home. You need to take into account utility costs, landscaping, commute costs, repairs, renovations, and all the furniture you want to fill your new home.
Do you have enough for a down payment?
Down payment amounts can range from 3% to 20%. That can be a sizable chunk of change. If you can’t come up with the funds on your own, you can look at other means of coming up with the down payment, such as a family gift or an assistance program. With mortgage rates so low, it may also make sense to dip into your retirement funds.
Don’t forget those closing costs.
Make sure that you include closing costs into your overall home buying expenses. Closing costs can average from 2% – 5% of the loan amount. So if the home you’re buying in Albuquerque costs $300,000, you would pay from $6,000 to $15,000 in closing costs.
Check your credit.
As you surely already know, your credit makes an enormous difference in your ability to buy a home. Yes, you can but a home with poor credit, but it will probably cost more up front and have higher monthly payments. Check your credit and see if you can get it as high as possible before you buy. Make sure you dispute any errors with credit agencies.
Do you have an emergency fund?
Having an emergency fund will help you deal with, well, emergencies after you buy a home. You never know what will break or need repairs down the road. You will be the landlord now, so it’s up to you to take care of repairs.
Are you ready for the responsibility?
Let’s talk about those repairs. What are you going to do when the air conditioner breaks on the hottest day of the year? Or the roof leaks on the rainiest day of the year? Or your fence blows over in a storm or your toilet overflows in the middle of the night?
All of this may seem like a lot to take in. But this is what it takes to buy a home. It’s worth the effort. Once you’re sitting in your very own home in Albuquerque, you won’t regret the sacrifice you made to get there. Let Sandi Pressley and her team show you how you can be an Albuquerque home owner.
Make sure to join us twice a week on our blog for more real estate advice and great reasons to buy a home in Albuquerque and the surrounding area. Follow us on Facebook for the latest Albuquerque real estate updates. Looking for the perfect home for sale in Albuquerque? Our easy-to-use home search tool can help you start the process. Contact us today to help you buy or sell your next home in Albuquerque.
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