The Priority Group
Amy Serra Albright, The Priority GroupPhone: (248) 882-5515
Email: [email protected]

Considering Your Finances: Is Home Ownership the Best Choice?

by Amy Serra Albright 01/06/2025

Whether you’re planning on buying investment property or a new home, there are financial factors to consider. Knowing the details of your financial situation will help you make the best decision and help avoid unnecessary stress. If you’re trying to decide between renting and buying, here are some of the main financial things to go over:

Savings

Most financial experts advise you to save up to 6 months of emergency savings before you buy a home. Emergency savings are always a good idea to have, but when you’re considering purchasing a home, it becomes especially important. Before making a major investment, make sure you have the means to stay afloat in case something goes wrong.

Down Payments

It’s possible to purchase a home with a tiny down payment, but even the lower percentages are thousands of dollars. The bigger the down payment, the less money you owe to your lender. For this reason, many potential homebuyers opt for a larger down payment both to save on accrued interest and private mortgage insurance.

Debt-to-Income Ratio (DTI)

Most lenders will consider your debt-to-income ratio as part of your qualification for a loan. Luckily, this ratio is simple to calculate yourself. To find your own DTI, divide your monthly expenses—including loan and credit card payments—by your monthly gross income. This will give you a good idea of how you stack up compared to lender requirements.

Credit Score

Higher credit scores typically mean better chances of being approved for a lower interest rate on a mortgage. Your credit score comprises many financial factors. You can improve it by lowering your credit usage and paying your bills on time. While it might not seem important, even a percentage point matters for getting a good interest rate.

The financial part of home ownership can be overwhelming, but as long as you know the important metrics, you will make the best decision for your own situation. Keep these financials in mind to make the best choice.

About the Author
Author

Amy Serra Albright

As a top producing agent, I specialize in Oakland and S. Genesee County areas.  I work with all types of Buyers and Sellers, including first time, move up, relocation, second homes, luxury homes & investors.  I am a company top producer with Real Estate being my full time job.  Through out my over 20 years in the business, I have been actively involved in my local Board of Realtors serving as a committee chairman, a member of the Board of Directors and as past president of my local board of Realtors. I love my job and love all things real estate. My goal is to provide you with an experience above and beyond your expectations so you will want to refer me to your friends and family.  I constantly strive to build a strong working relationship with my clients.  My goal is to be “Your Realtor for Life”. Let me make you and your Real Estate needs my number 1 Priority!