Smart financial advice from local experts. Dollar & #ense Questions to Consider Before Purchasing Your First Home By Scott Tyra, Mortgage Lender, First National Bank & Trust Buying a new home in 2020? Owninga home is a greatinvestment. But before jumping into the market it is extremely important for consumers to consider the costs involved and budget accordingly to ensure they're able to meet all of their financial obligations. Consider these questions before purchasing your first home: 1. How much money do you have saved up? Start with an evaluation of your financial health. Figure out how much money you have for a down payment or deposit on a rental. Down payments are typically S to 20 percent of the price of the home. Security deposits on rentals are usually about one month of rent and more if you have a pet. But be sure to keep enough in savings for an emergency fund. It's a good idea to have three to six months of living expenses to cover unexpected costs. 2. How much debt do you have? Consider all of your current and expected financial obligations like your car payment and insurance, credit card debt and student loans. Make sure you will be able to make all the payments in addition to the cost of your new home. Aim to keep total rent or mortgage payments plus utilities to less than 25 to 30 percent of your gross monthly income. Recent regulatory changes limit debt to income (DTI) ratio on most loans to 43 percent. 3 What is your credit score? Consider all of your current and expected financial obligations like your car payment and insurance, credit card debt and student loans. Make sure you will be able to make all the payments in addition to the cost of your new home. Aim to keep total rent or mortgage payments plus utilities to less than 25 to 30 percent of your gross monthly income. Recent regulatory changes limit debt to income (DTI) ratio on most loans to 43 percent. 4. Have you factored in all the costs? Create a hypothetical budget for your new home. Find the average cost of utilities in your area, factor in gas, electricity, water and cable. Find out if you will have to pay for parking or trash pickup. Consider the cost of yard maintenance and other basic maintenance costs like replacing the air filter every three months. If you are planning to buy a home, factor in real estate taxes, mortgage insurance and possibly a home owner association fee. Renters should consider the cost of rental insurance. 5. How long will you stay? Generally, the longer you plan to live someplace, the more it makes sense to buy. Over time, you can build equity in your home. On the other hand, renters have greater flexibility to move and fewer maintenance costs. Carefully consider your current life and work situation and think about how long you want to stay in your new home. Mortgage Lender Scott Tyra First National Bank & Trust 3805 10th St. Menominee 906.863.7861 · fnbimk.com Smart financial advice from local experts. Dollar & #ense Questions to Consider Before Purchasing Your First Home By Scott Tyra, Mortgage Lender, First National Bank & Trust Buying a new home in 2020? Owninga home is a greatinvestment. But before jumping into the market it is extremely important for consumers to consider the costs involved and budget accordingly to ensure they're able to meet all of their financial obligations. Consider these questions before purchasing your first home: 1. How much money do you have saved up? Start with an evaluation of your financial health. Figure out how much money you have for a down payment or deposit on a rental. Down payments are typically S to 20 percent of the price of the home. Security deposits on rentals are usually about one month of rent and more if you have a pet. But be sure to keep enough in savings for an emergency fund. It's a good idea to have three to six months of living expenses to cover unexpected costs. 2. How much debt do you have? Consider all of your current and expected financial obligations like your car payment and insurance, credit card debt and student loans. Make sure you will be able to make all the payments in addition to the cost of your new home. Aim to keep total rent or mortgage payments plus utilities to less than 25 to 30 percent of your gross monthly income. Recent regulatory changes limit debt to income (DTI) ratio on most loans to 43 percent. 3 What is your credit score? Consider all of your current and expected financial obligations like your car payment and insurance, credit card debt and student loans. Make sure you will be able to make all the payments in addition to the cost of your new home. Aim to keep total rent or mortgage payments plus utilities to less than 25 to 30 percent of your gross monthly income. Recent regulatory changes limit debt to income (DTI) ratio on most loans to 43 percent. 4. Have you factored in all the costs? Create a hypothetical budget for your new home. Find the average cost of utilities in your area, factor in gas, electricity, water and cable. Find out if you will have to pay for parking or trash pickup. Consider the cost of yard maintenance and other basic maintenance costs like replacing the air filter every three months. If you are planning to buy a home, factor in real estate taxes, mortgage insurance and possibly a home owner association fee. Renters should consider the cost of rental insurance. 5. How long will you stay? Generally, the longer you plan to live someplace, the more it makes sense to buy. Over time, you can build equity in your home. On the other hand, renters have greater flexibility to move and fewer maintenance costs. Carefully consider your current life and work situation and think about how long you want to stay in your new home. Mortgage Lender Scott Tyra First National Bank & Trust 3805 10th St. Menominee 906.863.7861 · fnbimk.com