Embarking on the journey of being a first-time home buyer can be a scary adventure. There are very few Indiana homeowners who don’t tell a story of their first-time that ends up sounding like roller coaster ride. Buying a home can be like having a baby. You feel like you’re the first person to ever encounter such a daunting experience, but really, people have been doing this for many years.
With the $8000 First-time Indianapolis Home Buyer Tax Credit about to run out at the end of November, 2009, it’s time to bite the bullet as a first-time home buyer and take the plunge. There are many Indianapolis homes for sale to choose from and just as many Indianapolis REALTORS® available to help you find one.
The current mortgage crisis in the United States is actually good news to the first-time home buyer in the sense that you are more likely to get a deal on the home you’d like to buy. Not all Indianapolis-area neighborhoods have been affected by falling home prices, but many have and you can take advantage of this in the current Indianapolis real estate market.
So, being a first-time home buyer, what should you consider before moving forward?
Are you ready? Even with the state of our economy and subsequent real estate debaucle, homeownership can be a good investment for your financial future. However, if you like to move every year or so and don’t like to be tied down in general, you might want to stay in that apartment a little while longer because your home may not be able to build up the equity to make it worth it.
What should you spend? To qualify for a mortgage today, there are two requirements you need to meet in terms of ratios. The first, the ratio regarding your housing expense, takes your property taxes, insurance and monthly mortgage payment in consideration against your gross income per month. This ratio should not be in excess of 28%, comparing the monthly housing expense against gross income per month.
In addition, the second ratio takes into consideration your complete monthly debt obligations against gross monthly income. When comparing these, the ratio should not be in excess of 36%.
What community do you want to join? You may not think much about this, but often times when you buy a house, you are becoming part of a larger community. There will be an energy to your neighborhood that you will want to make sure fits your lifestyle. For example, is a family atmosphere important? Walking trails? Community activities? Certainly, everyone will want as low a crime rate as possible so even look for official if neighborhood watches are in place.
Do you have the funds to close? Closing on your home will require various funds, depending on how you are financing your home. If you have negotiated the seller to pay closing costs and you are obtaining 100% financing, it’s possible this won’t be an issue. However, you will most likely need to have access to money for a down payment and various closing costs such as title insurance and the appraisal. Along the way too, you will need to pay for such things as a home inspection.
Can you cover things like home maintenance? Once in your home, it will be important to set aside money to pay for items that break in your home. Purchasing a home warranty, or negotiating that the seller pays for it, can help cover these costs as they arise. Other maintenance issues to consider is when the home will need a new roof, purchasing landscaping equipment, etc.