• Contact Us
  • Become A Member
  • Business
Online Banking Login
Forgot password? Not signed up? Enroll Now
  • Personal
    • Checking Accounts
    • Savings Accounts
      • Money Market Accounts
      • Health Savings Accounts
      • Share Certificates
      • IRA
    • Mobile & Online Banking
      • New Digital Banking
    • VISA Debit
    • VISA Credit
    • Insurance
    • HERO Financial Counseling
    • Teen Debit Account
  • Loans & Credit
    • Auto, Motorcycle and RV Loans
      • Auto Buyer’s Guide
      • Shop Enterprise Car Sales
    • Personal Loans
      • Personal Loans and Line of Credit
      • Credit Builder Loan
    • Student Loans
      • Smart Option Student Loan®
      • Money Tips For College Students
    • Rates
    • VISA Credit
    • Pay Loans Online
    • Credit & Financial Review
  • Home & Mortgage
    • Home Equity Loans
    • Mortgage Team
    • Mortgage Process
    • Rates
    • First-Time Homebuyer 101
    • Pay Your Mortgage
  • Financial Planning
    • Financial Planning Team
    • Guided Wealth Portfolios
    • Financial Planning Resources
    • Financial Planning Account Access
  • About Us
    • Younity
    • Eligibility
    • ATM & Branch Locations
      • Boyertown
      • Cumru
      • Exeter
      • Muhlenberg
      • Pottstown
      • Royersford
      • Tower Health Reading Hospital
      • Contact Center
      • Wyomissing
    • Careers & Internships
    • Annual Reports & Board Election
    • Community Involvement
      • Scholarships
      • Charity Golf Invitational
      • Calendar of Events
    • Mystery Shoppers
    • Contact Us
  • Learn
    • Blog
    • Diamond Youniversity
    • Zogo Financial Education App
  • Tools & Resources
    • Calculators
    • Account Management Tools
    • FAQs
    • Transfer Funds
    • Financial Safety & Security
Online Banking Login
Not signed up? Enroll Now
Forgot password? Not signed up? Enroll Now
  • Personal
    • Checking Accounts
    • Savings Accounts
      • Money Market Accounts
      • Health Savings Accounts
      • Share Certificates
      • IRA
    • Mobile & Online Banking
      • New Digital Banking
    • VISA Debit
    • VISA Credit
    • Insurance
    • HERO Financial Counseling
    • Teen Debit Account
  • Loans & Credit
    • Auto, Motorcycle and RV Loans
      • Auto Buyer’s Guide
      • Shop Enterprise Car Sales
    • Personal Loans
      • Personal Loans and Line of Credit
      • Credit Builder Loan
    • Student Loans
      • Smart Option Student Loan®
      • Money Tips For College Students
    • Rates
    • VISA Credit
    • Pay Loans Online
    • Credit & Financial Review
  • Home & Mortgage
    • Home Equity Loans
    • Mortgage Team
    • Mortgage Process
    • Rates
    • First-Time Homebuyer 101
    • Pay Your Mortgage
  • Financial Planning
    • Financial Planning Team
    • Guided Wealth Portfolios
    • Financial Planning Resources
    • Financial Planning Account Access
  • About Us
    • Younity
    • Eligibility
    • ATM & Branch Locations
      • Boyertown
      • Cumru
      • Exeter
      • Muhlenberg
      • Pottstown
      • Royersford
      • Tower Health Reading Hospital
      • Contact Center
      • Wyomissing
    • Careers & Internships
    • Annual Reports & Board Election
    • Community Involvement
      • Scholarships
      • Charity Golf Invitational
      • Calendar of Events
    • Mystery Shoppers
    • Contact Us
  • Learn
    • Blog
    • Diamond Youniversity
    • Zogo Financial Education App
  • Tools & Resources
    • Calculators
    • Account Management Tools
    • FAQs
    • Transfer Funds
    • Financial Safety & Security
A couple looking at a computer, ready to buy a house.

Am I Ready to Buy a House?

Index

  • Create a Monthly Budget
  • Make Sure You Can Afford Your Monthly Payment
  • Build a Post-Settlement Emergency Fund
  • Ask Questions Now to Avoid Problems Later

While buying your own home can be very exciting, it’s important to ask yourself, “am I ready to buy a house?” before taking the plunge. Making sure you’re financially ready for homeownership will save you heartache (and headaches) down the road. Keeping your financial health in mind and staying informed about the costs of buying a house will set you up for long-term success as a homeowner.

Create a Monthly Budget

One of the best ways to answer the question, “can I afford to buy a house?” is to create a detailed budget. Your budget should account for your monthly income and expenses and include all of the costs of homeownership. This includes (but is not limited to):

  • Mortgage payment (principal, interest, taxes, and homeowners insurance)
  • HOA or condo fees (if applicable)
  • Utilities (electric, water, sewer), trash, Internet/TV, etc.

Along with ensuring you have enough money to cover your monthly expenses, your budget can help you develop better financial habits. Plus, it makes it easier to save for the future since you can build savings and investment contributions into your budget.

Budgeting also gives you a clear picture of what you need to do to pay off any debt you may be carrying. And should you need to take on new debt, your budget can help you determine how much you can afford. Tracking how much you spend on necessary items can also help you avoid spending money on non-necessities that you haven’t budgeted for.

Diamond’s Sr. Real Estate Originator, Ben Huard, had the following to say about the importance of a monthly budget: “Members often ask me to confirm whether they can or should be able to afford a mortgage payment. The truth is that everyone’s different and what one person can afford on a certain salary, another person may not be able to. It’s very important when making such a large purchase to have a good handle on your finances and have a monthly budget prepared.”

Make Sure You Can Afford Your Monthly Payment

Imagine finding the home of your dreams, signing on the dotted line, and quickly realizing you can’t afford your monthly payment. Lenders may offer to lend you more than you can afford to pay each month, leaving you house poor or in serious debt. Don’t neglect to realistically answer, “how much house can I afford?”

You can avoid an unaffordable monthly payment by asking lenders how they’ve calculated what you can afford. In most cases, this will include your income, debt, assets, and liabilities. They’ll also factor in your front-end ratio (mortgage-to-income) and back-end ratio (debt-to-income). Experts advise only taking on a mortgage that’s 2-2.5 times your gross income to ensure that you can afford your monthly payment.

According to Huard, “If you’re still living at home and aren’t sure if you can afford your mortgage, try saving the payment amount for a few months. If you find you can’t do it — or you can’t do anything you enjoy — that tells you all you need to know about whether that new mortgage payment is comfortable for you”.

Build a Post-Settlement Emergency Fund

Unfortunately, there are a lot of things that can go wrong in your new home. Everything from the appliances in your kitchen to the paint on your ceilings may need maintenance at some point. That’s why it’s very important to have a rainy day fund saved for emergencies or repairs that may pop up after settlement.

Statistics show that American homeowners spend an average of $2,000 a year on home maintenance. To counter these expenses, experts recommend saving 1-4% of your home’s value every year. Start small by building contributions to your emergency fund into your budget. This is especially crucial if you’re planning on renovating your home in the future.

Ask Questions Now to Avoid Problems Later

Don’t hesitate to ask your lender or real estate agent about anything you’re unsure of. Asking questions upfront can help you avoid issues or sticker shock down the road. Some of the most important questions you should ask to help you answer, “am I ready to buy a house?” include:

  • How much house can I afford?
  • How much am I qualified to borrow?
  • How much should I save for a down payment?
  • What is my interest rate? Is it fixed or adjustable? Does it include points? When can I lock it in?
  • What are my estimated closing costs? Are there other costs I should know about?
  • When will my closing be? What do I need to bring to closing? Are there factors that might delay closing?
  • What are the differences between being prequalified and preapproved for a mortgage?
  • Do you handle underwriting in-house? What is your average loan processing time?
  • What happens if my appraisal comes in too low?

Are you asking yourself, “can I afford to buy a house?” Visit our Mortgage Center or reach out to our team of professionals today! We’d love to help you get into your dream home.

 

Index

  • Create a Monthly Budget
  • Make Sure You Can Afford Your Monthly Payment
  • Build a Post-Settlement Emergency Fund
  • Ask Questions Now to Avoid Problems Later

Notice

You are leaving Diamond Credit Union website. Clicking proceed will take you to a website that Diamond may not be affiliated with and may not represent the views of the credit union.

  • About Us
  • ATM & Branches Locations
  • FAQs
  • Contact Us
  • Card Emergencies

Equal Housing Opportunity.

Your savings federally insured to at least $250,000 and backed by the full faith and credit of the United States Government by the National Credit Union Association, a US Government Agency.

Local Phone Number: 610-326-5490
Toll Free Phone Number: 800-593-1000
Routing Number: 231385154
  • Third Party Notice
  • Privacy Policy
  • Sitemap
  • Browser Compatibility