Part of the American dream is owning a home, perhaps in our beautiful state of Wisconsin. A Midwest home from Turnkey Homes, LLC is a place to make memories, grow a family, and where you can retire. With this concept in mind, June is designated as National Homeownership Month. It is a time to celebrate the value that owning a home brings to families, communities, and neighborhoods across America. It’s also a time to recognize the organizations that help individuals and families to achieve their goal of homeownership.
Owning a house is important because it is a key to your long-term financial success. You will be able to take advantage of certain tax deductions such as mortgage interest payments, property taxes, and home office use if you work from home. Real estate increases in value over time, meaning that typically a house will be worth more than what you paid for it, yielding a profit when you sell. And if the house is worth more than the mortgage against it, you can take an additional loan against the equity to use for projects like remodeling, repairs, or improvements to your Wisconsin home.
Requirements to Buy a House
If you are ready to start your journey to homeownership in Wisconsin, here are a few of the most typical requirements you will need to fulfill. A short list includes a down payment, a lender, good credit scores, a healthy debt-to-income ratio, and funds for closing costs. Here’s a breakdown of what each of these items means.
Down Payment. This should be your first step – saving money for the downpayment. It is a cash payment of a portion of the purchase price. It can range from as little as 3% to as much as 20% of the purchase price. In simple math, that is a minimum of $3,000 per $100,000 of the purchase price. The exact downpayment amount required will depend on the type of loan you secure and the lender’s stipulations.
The Lender. Not all financial institutions lend under the same terms and at the same interest rate, so be sure to shop around. There are several types of loans (fixed rate, variable rate, balloon, etc.), so be sure to research the terms of each loan to find the one that is best suited to your financial situation. Interest rates change daily based on the federal government and market, so timing when you lock in a rate is crucial to guarantee that your financial commitment is within your budget. Start watching the current lending interest rates and listen to financial advisors who can explain the trends. Understanding when interest rates are going up, or predicted to come down, will help you decide the best time to buy a home.
Credit Scores. Borrowers with the best credit records will obtain the lowest interest rates. While you are saving towards your downpayment, be sure to pay your bills on time to establish a record of good credit. Debt-to-Income Ratio. Most mortgage lenders will require a DTI ratio of 43% or less. This means a maximum of 43% of your gross monthly income should be going toward your overall monthly debts, including the new mortgage payment. And of that amount, only 28% or less should be dedicated to your new mortgage payment. For example, if you earn $10,000 per month, then your monthly expenses should be no more than $4,300, and the mortgage payment should be no more than $1,204.
Closing Costs. Besides the mortgage, there are additional expenses when you buy a home, known as closing costs. These costs include realtors’ commissions, the closing agent’s fees, title searches, document recording fees, property surveys, home inspections, and more. As you save for a downpayment, include additional cash funds to cover these closing costs. Alternatively, your lender may agree to incorporate them into your loan. In that scenario, be prepared for a higher loan amount.
Turnkey Homes Understands the Home-Buying Process
Meeting the requirements to buy a home takes commitment, hard work, and perseverance. So, if you have achieved this incredible goal, be sure to acknowledge and celebrate your hard work and accomplishment. Turnkey Homes, LLC is an experienced home builder in Wisconsin and understands the home-buying process and wants to guide you on your path to homeownership. Review our portfolio and then meet with us to discuss how we can help you achieve the homeownership dream in Wisconsin. Building custom homes and spec homes is our focus, as well as remodeling. Whether you are looking to build a new home or remodel the one you just bought, Turnkey Homes can help.
Turnkey Homes, LLC
(920) 470-4315
turnkeyhomesllc.com
Recent Comments