Posts Tagged ‘home ownership’

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Have you been thinking about buying your own home? It’s the American dream, right? Well, if you are not prepared, that dream can become a nightmare. Buying a home may well be the single largest purchase you ever make, so ensure you are making informed decisions throughout the homebuying process. You may be asking yourself “what process?” It is not as simple as picking a home and moving in. There are things you can do before you ever begin looking for a house, and some of them can save you money in the long run. Here are 3 items that should be on your “to do” list prior to purchasing a home.

Identify your reasons for wanting to become a homebuyer, then examine the advantages and challenges.

Advantages may include:

  • A place of your own
  • Financial incentives
  • Scheduled savings
  • Stable housing costs
  • Increased value
  • Tax benefits

Challenges may include:

  • High cost of home ownership
  • Decreased mobility
  • Repair and maintenance
  • Possibility of foreclosure

Get your credit in shape.  Lenders use your credit score to determine your ability to make timely payments, manage credit limits and utilize different types of credit. The higher your score, the better chance you have at a lower interest rate, which can mean thousands of dollars over the course of your loan. Did you know you can receive a free copy of your credit report once a year from each of the three nationwide credit reporting companies (Equifax, Experian, and TransUnion)?  Visit annualcreditreport.com to order a copy. If you notice a mistake, you should report the discrepancy to have it removed.

Determine your budget and then shop around. When determining your budget there are a few things to consider. In addition to the money that you borrow (principal), you will pay homeowner insurance, and taxes (escrow), and interest. These items are often added together to make up the total monthly payment. You should also budget for other household expenses such as utilities, homeowner association fees, and general upkeep and repairs. A good place to start is to calculate your debt to income (DTI) ratio. Your DTI is all your monthly debt payments divided by your gross (before taxes and other deductions) monthly income. A general rule of thumb is to keep DTI under 36% (this number can fluctuate). 

Once you have your budget, shopping homebuyer assistant programs can pay off. The Ohio Housing Finance Agency has programs available for first-time buyers, veterans, college graduates, and first responders just to name a few. These types of programs often help with down payments, closing costs, or other pre-closing expenses.

You may also want to consider getting pre-approved with a reputable lender. Being pre-approved means you qualify for a loan, tells sellers you are a serious buyer, and helps you better understand your housing budget.

The journey to homeownership can be exciting. It builds wealth, increases stability, and even produces health benefits. When you are ready, visit the Homebuyer Education page through The Ohio State University Extension website to learn more.

Written by: Heather Reister, Family and Consumer Sciences Educator, Ohio State University Extension Butler County.

Reviewed by: Roseanne Scammahorn, Family and Consumer Sciences Educator, Ohio State University Extension Darke County.


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“Homebuyer Education.” Homebuyer Education | Family and Consumer Sciences, https://fcs.osu.edu/programs/healthy-finances-0/homeownership/homebuyer-education.

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