Buying a home in Albuquerque is a huge financial responsibility. Sure, buying a home is very exciting, but you need to also need to look carefully at your current and future plans before you take this important step in your life.
Here are five questions to consider:
Where Do You See Yourself in 5 Years?
How do you feel about your career? What about your family situation? So you see any of these things changing dramatically in the next few years?
If you plan on starting or growing your family in Albuquerqueor starting a new career, try your best to factor in those changes before you buy. You can’t predict everything, but you can make good guesses that can help guide your decision.
What Will It Cost to Both Purchase and Own Your New Property?
There’s more to the price of a home than just the initial purchase price.
A general rule of thumb is to keep your PITI (principal, interest, taxes, and insurance) costs below 28% of your gross monthly income, while your overall debt-to-income ratio should be no more than 36%.
If you are buying a bigger space than what you currently have, then you need to factor in increased heating and cooling costs. Also, plan for homeowner’s association dues if applicable.
In addition to the funds you have for your down payment, don’t overlook the following expenses you’ll incur once you purchase your home:
- Moving costs
- Closing costs
- Home repairs
- New appliances
It is recommend to open a separate savings account in addition to your down payment fund to save for these expenses.
What’s Your Credit Score?
Your credit score will make a huge difference in the overall cost of your home over the years. A higher score can save thousands of dollars over the course of your mortgage. And of course, a lower score can cost you a higher interest rate.
If you have any issues on your credit report, tackle them as soon as possible.
What About Home Repairs and Maintenance?
How much property in Albuquerque can you handle? Does the home have a pool or huge lawn, or landscaping? Will you maintain these elements, or will you hire them out to be maintained. Try to price all of this out before you buy to make sure you can afford it.
Location, Location, Location
Where you live can be just as important as what you live in. How far away is work, shopping, or other services you regularly use?
In addition to transportation costs, consider whether your food and utility costs will increase or decrease, and whether you’ll enroll kids in the local school district or opt for private schooling.