{"id":1845,"date":"2022-04-25T11:17:11","date_gmt":"2022-04-25T11:17:11","guid":{"rendered":"https:\/\/eagleinspectionpa.com\/?p=1845"},"modified":"2022-05-31T07:14:19","modified_gmt":"2022-05-31T07:14:19","slug":"what-should-you-keep-in-mind-before-buying-your-first-home","status":"publish","type":"post","link":"https:\/\/eagleinspectionpa.com\/what-should-you-keep-in-mind-before-buying-your-first-home\/","title":{"rendered":"What Should You Keep in Mind Before Buying Your First Home?"},"content":{"rendered":"<p>Spring is here, and so is the home buying and selling season. Are you ready to jump into homeownership? Is 2022 the year you finally own your own home? Eagle Inspections in Philadelphia is proud to be part of hundreds of home purchases every year. We provide <a href=\"https:\/\/eagleinspectionpa.com\/full-service-home-inspections\/\"><strong>full-service home inspections<\/strong><\/a> to buyers in Philadelphia, Bucks County, Montgomery County, and Delaware County.<\/p>\n<p>We\u2019ve learned a few things about home buying along the way. If you\u2019re considering purchasing a home, we suggest the following:<\/p>\n<h2>Learn to Look at Money Like a Mortgage Company<\/h2>\n<p>You have certainly thought about money when thinking about a house, but chances are your thoughts have been limited to these four questions:<\/p>\n<ul>\n<li>Do I have enough cash for a down payment?<\/li>\n<li>Can I afford the monthly mortgage payment?<\/li>\n<li>What are current interest rates?<\/li>\n<li>Will I qualify for a loan?<\/li>\n<\/ul>\n<p>These are good and valid questions. At the same time, it\u2019s important to dig a bit deeper and think about your money the way a mortgage broker will. That means considering the following:<\/p>\n<h3>Your Debt-to-Income Ratio<\/h3>\n<p>This calculation is how lenders determine if you can afford the monthly mortgage payment. They\u2019re typically looking for a debt-to-income (DTI) ratio of 43% or less, depending on the lender and the type of loan. If your DTI is 43%, that means that the total of all your monthly debt payments (credit cards, car loans, etc.) plus the home loan and all other related expenses equals 43% of your income. Let\u2019s put some numbers in to make this real:<\/p>\n<p>If your annual salary is $120,000, that means your monthly salary is $10,000. At this income level, a DTI of 43% means that monthly debt and housing payments cannot exceed $4300. The lower your DTI, the better and the more likely you are to qualify for a loan.<\/p>\n<p>Lenders don\u2019t like living on the edge, and they want to make certain, as best they can, that they\u2019ll get their money back. If you\u2019re concerned about qualifying or your DTI is hovering around the 43% mark, it\u2019s probably wise to pay down some debts and do what you can to increase your income before buying a home.<\/p>\n<h2>The Down Payment<\/h2>\n<p>Why is a down payment necessary? Why can\u2019t you just borrow the full value of the home? Again, the answer is about risk, a thing lenders don\u2019t like.<\/p>\n<p>A down payment of 20% is best. Lenders require buyers to put down less to pay monthly for private mortgage insurance (PMI). PMI protects lenders from risk, a cost they pass to the buyer. PMI can cost an average of $50\/month for every $100,000 borrowed. It\u2019s a sunk cost \u2013 it does nothing to your principal or interest; it\u2019s simply the cost of buying a home with a small down payment. And a lower down payment will decrease your loan amount and often increase your interest rate, so you get hit three times.<\/p>\n<p>Financially, it\u2019s far wiser to put 20% down, avoid PMI, have a lower mortgage payment because your loan is smaller, and qualify for a lower rate. You\u2019ll save a ton of money.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-1846 img-fluid\" src=\"https:\/\/eagleinspectionpa.com\/wp-content\/uploads\/2022\/05\/1_Eagle-Inspections_What-Should-You-Keep-in-Mind-Before-Buying-Your-First-Home__IMAGE2.jpg\" alt=\"Couple Buying Their First Home\" title=\"Schedule An Inspection Before Buying Home\" width=\"1200\" height=\"800\" srcset=\"https:\/\/eagleinspectionpa.com\/wp-content\/uploads\/2022\/05\/1_Eagle-Inspections_What-Should-You-Keep-in-Mind-Before-Buying-Your-First-Home__IMAGE2.jpg 1200w, https:\/\/eagleinspectionpa.com\/wp-content\/uploads\/2022\/05\/1_Eagle-Inspections_What-Should-You-Keep-in-Mind-Before-Buying-Your-First-Home__IMAGE2-300x200.jpg 300w, https:\/\/eagleinspectionpa.com\/wp-content\/uploads\/2022\/05\/1_Eagle-Inspections_What-Should-You-Keep-in-Mind-Before-Buying-Your-First-Home__IMAGE2-1024x683.jpg 1024w, https:\/\/eagleinspectionpa.com\/wp-content\/uploads\/2022\/05\/1_Eagle-Inspections_What-Should-You-Keep-in-Mind-Before-Buying-Your-First-Home__IMAGE2-768x512.jpg 768w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/p>\n<h2>Beyond Money<\/h2>\n<p>Money isn\u2019t the only consideration; other factors also determine if now is a good time to buy.<\/p>\n<h3>The Market<\/h3>\n<p>Is it a buyer\u2019s or seller\u2019s market? If the supply of houses is high, you\u2019ll be able to make a better deal. In a seller\u2019s market, home prices are inflated, making it difficult to find a home at a reasonable price and increasing the risk that the home will decline in value over time. Be very wary of buying a home in a seller\u2019s market; opt to wait until demand and supply stabilize.<\/p>\n<p>Spring is a popular time to buy and sell, but it might be wise to consider shopping for a home off-season. Sellers who need to move their homes in the fall or early winter are often desperate for buyers, and you can get a good price. You won\u2019t have as many homes to choose from, but you can often find a very good deal.<\/p>\n<h3>Your Life<\/h3>\n<p>Is now a good time? Is your job stable? Do you have a need for extra space? Do you want your kids to change schools? Can you live your current life and pay for a new home? Do you have the time to care for a home on your own? These and other questions all need to be part of your decision.<\/p>\n<p>Another important question is, how long do you anticipate owning the home? Buying a home is expensive, not just because of the monthly mortgage payments. Several one-time fees are part of the purchase process. If you think that you might need to move on within five years, purchasing a home might not be the best financial decision. If you\u2019re determined to buy anyway, purchase a much less expensive home than the upper limit of your budget, so you don\u2019t risk taking a devastating hit when it\u2019s time to sell.<\/p>\n<h2>Our Last Piece of Advice<\/h2>\n<p>The last piece of advice from Eagle Inspections is this: always <strong><a href=\"https:\/\/eagleinspectionpa.com\/get-a-quote\/#inspection\">schedule an inspection<\/a><\/strong>. During an inspection, professional home inspectors visit the home and take a detailed, comprehensive look at the condition and safety of the home from the roof to the foundation and everything in between. The skilled home inspectors at Eagle Inspections will look carefully at your dream home and let you know if there are any red flags that need to be addressed before you sign on the dotted line.<\/p>\n<p>Buying a home is a big decision. We\u2019re excited that you\u2019re ready to venture into owning a home. When you\u2019ve found the house you want, call Eagle Inspections to check it out for you. We help our customers buy with confidence. Call today.<\/p>\n<p><script type=\"application\/ld+json\">{\n    \"@context\": \"https:\/\/schema.org\",\n    \"@type\": \"BlogPosting\",\n    \"mainEntityOfPage\": {\n    \"@type\": \"WebPage\",\n    \"@id\": \"https:\/\/eagleinspectionpa.com\/what-should-you-keep-in-mind-before-buying-your-first-home\/\"\n    },\n    \"headline\": \"What Should You Keep in Mind Before Buying Your First Home?\",\n    \"description\": \"Ready to buy your first home? Eagle Inspections in Philadelphia shares tips for new home buyers. 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We provide full-service home inspections to buyers in Philadelphia, Bucks [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1847,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"pgc_meta":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[7],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What Should You Keep in Mind Before Buying Your First Home?<\/title>\n<meta name=\"description\" content=\"Ready to buy your first home? Eagle Inspections in Philadelphia shares tips for new home buyers. 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