Are you buying a home? If so, you’re making the right decision. A house will provide you and your family a sense of financial security that no other asset can confer. You also stand to save a lot of money in the long run by not renting.

Indeed, nothing beats owning a home. However, when purchasing your first house, it’s easy to fall into common financial pitfalls or settle for a home that you’re not pleased with.

Need a hand? After you call a Pennsylvania real estate agent, follow our home buying checklist below to ensure that you’re fully prepared to go through with the purchase.

1. Consider Your Budget

Your budget will determine your options. To calculate how much you can afford for your home, begin by calculating your DTI (debt-to-income) ratio.

Your DTI ratio is the amount of money you regularly pay monthly divided by your gross monthly income. As you calculate the amount, you will end up with a figure expressed in percentage points. If you’re buying a home, you’ll want this figure to be no more than 40%.

“Why 40%,” you ask? Well, unless you’re paying for your home in a lump sum, you’ll likely be dealing with lenders. Most, if not all, lenders will only approve a home loan if you have a DTI lower than 43%.

2. Know Your Credit Score and — if Possible — Improve it

Having an acceptable DTI ratio can get you far with lenders. However, you can improve your chances of taking out lower-interest mortgage loans with the right credit score.

Most lenders will want your FICO scores to be in the ballpark of 620 to 800.

If your score falls below 620, don’t worry; there are ways to improve your FICO score. The simplest is to pay off small debts, make your payments on time, and keep diverse lines of credit open without hitting your credit limit on any cards.

3. Check out Listings in Your Area

Once you’ve figured out your budget, you can check out listings in your area. While viewing property listings will show you your options, the more important part of this is that it will allow you to see average home prices.

If you want options that will be a perfect fit for your budget, speaking to a Pennsylvania real estate agent can help. Reach out to us and let’s talk about getting you a home that fits your lifestyle, tastes, and budget.

4. Save for a Down Payment

After you’ve learned the average prices of homes in your area, you can calculate the down payment — usually about 20% of the house’s value — and begin to save for it.

We set the number at 20% because this figure sets you up for reasonable mortgage interest rates. Being able to pay 20% also saves you money by eliminating the need to pay for private mortgage insurance each month.

The Most Important Step: Call a Trusted and Reputable Pennsylvania Real Estate Agent

Knowing your budget and being ready to make a down payment is half the battle. For a Pennsylvania real estate agent that takes care of the other half, look no further.

Are you a hopeful buyer? Contact us today so we can talk about getting you your dream home.