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Today, Monica Munoz Andry, UFCU Financial Health Program manager and one of our financial experts from UFCU, talked to us about preparing to buy a home.
So, tell us, what should we consider when first thinking about buying a home?
More than 70% of Americans consider homeownership to be an important part of the American Dream. It’s a very important decision, and several costs need to be considered outside of the monthly mortgage payments.
Upfront costs like:
Ongoing costs can also include:
It’s best to do the math and use a mortgage calculator that lets you get a feel for what you can afford and what costs you can expect.
What are some financial considerations we should be aware of as we prepare to buy a home?
For many people, the biggest obstacles to homeownership are low credit scores and paying off current debts.
To prepare for future homeownership, you should improve your credit score. You can check your credit report for free at AnnualCreditReport.com and make sure it’s accurate. UFCU also offers a free credit review consultation that can help you assess where you are. In addition, strive to make on-time payments for all bills and avoid getting further into debt.
It’s also good to examine your current spending and create a budget.
Pay down your debts to improve your debt-to-income ratio. Your DTI equals your monthly debt payments divided by your gross (or pre-tax monthly) income. When looking at ways to pay down debt, focus on revolving debt first, which includes things like credit cards.
Save up for a down payment and other upfront costs, like new appliances or furniture.
We’re all so excited to buy a home that we often forget about what comes after. How else will buying a home impact our monthly expenses?
Buying a home may change some of your monthly expenses, especially in the areas of:
It’s good to consider these costs when re-doing your budget to make sure you are prepared for all that comes with being a homeowner.
How can a financial professional help with this process?
That’s a great question. Working with a financial professional may help you:
When thinking of homeownership, it’s key to reflect on your situation and consider your reasons for buying a home, budget, needs, lifestyle, and finances. This will help you better identify an ideal time to buy a home. As the #1 Mortgage Lender in Central Texas, UFCU is happy to help you achieve your homeownership dream.
Again, we’re thrilled to have UFCU representative Monica share financial advice regarding homeownership.
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