Common Questions About Getting Started With
Owning a Home
How do I know if I am ready to buy a home?
Ask yourself these questions and if you can answer "yes" to
these questions, you are probably ready to buy your own home.
- Do I have a steady source of income (usually a job)? Have I
been employed on a regular basis for the last 2 - 3 years? Is my
current income reliable?
- Do I have a good record of paying bills?
- Do I have few outstanding long-term debts, like car
- Do I have money saved for a down payment?
- Do I have the ability to pay a mortgage every month, plus
How do I begin the process of buying a home?
Start by thinking about your situation. Are you ready to buy a
home? How much can you afford in a monthly mortgage payment? How
much space do you need? Do you have access to land? After you
answer these questions, make a "To Do" list and start doing casual
How does purchasing a home compare with renting?
The most significant advantage to renting is being generally
free on most maintenance responsibilities. But by renting, you lose
the chance to build equity, take advantage of tax benefits, and
protect yourself against rent increases. Also, you may not be free
to decorate without permission and may be at the mercy of the
landlord for housing.
Owning a home has many benefits. When you make a mortgage
payment, you are building equity, which is an investment. Owning a
home can also qualify you for tax breaks that actually lower your
monthly out-of-pocket costs. Given the freedom, stability, and
security of owning your own home, it is worth it.
How does the lender decide the maximum loan amount that I can
The lender considers your debt-to-income ratio, which is a
comparison of your gross (pre-tax) income to housing expenses and
non-housing expenses. Non-housing expenses include long-term debts
like car or student loan payments, alimony, or child support.
According to Salt River Financial Services guidelines, the mortgage
payment combined with non-housing expenses should total no more
than 41% of income. The lender also considers cash available for
down payment and closing costs, credit history, etc. when
determining your maximum loan amount.
How can I determine my housing needs before I begin the
Your home should fit the way you live, with spaces and features
that appeal to the whole family. Before you begin considering home
ownership, make a list of your priorities - such as location and
size. Is your allotment accessible to water, electricity, and other
service related needs? Will there be any rights-of-way issues with
the allotment? Will the allotment pass the "Homesite Withdrawal"
process (see the SRPMIC Realty Department for more information)?
What kind of amenities are you looking for? Establish a set of
minimum requirements and a "wish list". Minimum requirements are
things that a house must have for you to consider it. A "wish list"
covers things that you would like to have but are not