With spring right around the corner and mortgage rates near a record low, now is the perfect time to prepare for your next big move. But before you start picking out paint swatches, ask yourself these five questions to make sure you’re ready:

1. Are your finances in order? Add up your monthly expenses — credit cards, auto loans, student loans, current rent or mortgage, cable and internet, phone plan, other recurring payments — and divide that by your gross monthly income (income before taxes) to determine your debt-to-income ratio. This number helps you determine the range of homes that fit your budget. The lower your ratio, the better. Ideally, you want your DTI ratio to be 43% or less.*
2. Have you saved enough for your down payment? We offer multiple low down payment programs with as little as 3% down.** On a $200,000 home, that’s $6,000. However, you’ll also need enough to cover closing costs, insurance, taxes, and any immediate repairs. And if this is your first home, you might have other expenses like a lawn mower, or a washer and dryer.
3. Can you afford the monthly payments? It’s not just your home you’re paying for each month. You’ll also need to pay property taxes, insurance, homeowner’s association fees, city assessments, water, sewer and/or garbage, utilities, and repairs. All of these expenses should be taken into consideration when planning your monthly budget.
4. Are you committed to the area? If you’re already looking at homes in a specific city, consider what the traffic is like. How are the schools? Any railroad tracks or airports nearby that could be a nuisance? Remember, you’re not just purchasing the house. You’re buying into the whole neighborhood.
5. Do you have enough saved up for any repairs? It’s fun to fantasize about your dream home, but eventually, we all have to live in reality. Make sure you have enough saved up for any essential repairs that could come up during the home inspection process.

If you answered “yes” to all five of these questions, you’re ready to move forward.

Visit LMCU.org/Mortgage or call us at (844) 754-6280 to get pre-qualified.

*Credit Karma, 2019.