Sat Aug 31 2024, by Tyler Gardner

Three Crucial Insights About Money for First-Time Homebuyers

Here are the three things that nobody tells you about money when you purchase your first home.

I'm Tyler, I'm a former financial advisor and portfolio manager. Now I make financial content for free so that you don't have to pay for it.

1. Understanding Your Debt-to-Income Ratio

Number one, the mortgage officer wasn't just trying to be a complete pain in the butt, even though they were. When they told you that your DTI, debt to income ratio, needed to be under 36%, they were trying to save you from becoming house poor. You should honestly aim for a 25% or less DTI for your first home.

2. Additional Expenses to Consider

Number two, what that mortgage officer was also trying to help you realize is that DTI, that 36% of all of your income, it's only just the beginning of what you're gonna pay. Because that doesn't include expenses like lawn care, plowing, sewer, electric, utilities, cable, internet, and maintenance. So you better work that into your calculations too.

3. Prepare for Unexpected Repairs

And number three, this is the biggest one you need to remember. Whether it's a leaky faucet, a loose board on a porch, or something wrong with something having to do with electricity. If you can't fix it yourself, expect to pay around $200 every time someone shows up at your door. So you better have a lot of those $200 bills ready to go.

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