Kansas City Real Estate - Before You Buy A House In Kansas CIty

Having enough self-discipline to save money for the down payment on the perfect new house in the beautiful Kansas City area isn’t easy. What makes it even more difficult is leaving that money alone once it starts to accumulate. Your mind starts making suggestions about other things to which those savings could be applied.

Would it really hurt if you went ahead and bought that new car? After all, they’re offering wonderful financing options and those options on that specific car make it seem as though it’s kismet. Besides, even with the prospect of a mortgage on a home in Kansas City, you could still afford that car payment. And, since you’re saving so much money on the car, why not take those savings and treat yourself to some fine jewelry? Let’s face it, who knows when that diamond necklace that you’ve been eyeing since May will be priced that low again. Would it really hurt to go a little crazy?

Stop! Whether or not you can afford the mortgage AND the car payment is not what your loan officer wants to know. Why not? A small but important thing called the debt-to-income ratio. Just as it sounds, lenders will take a look at what your gross income is compared to your amount of monthly debt. So, that brand new car payment can increase that monthly debt amount and tip the scales out of your favor.

This same logic applies to any other purchases you may be pondering. This includes furniture, the aforementioned jewelry, and yes, the other big expense….a fairytale wedding. You can still have all of those things if you are able to afford them AFTER you purchase your home. Typically, you want to keep your debt down to around 30 percent of your income.

Besides your debt-to-income ratio, your lender will also look into your financial records. From the time you become serious about buying a home, it’s a smart idea to start keeping detailed records of all of your accounts, including your checking, savings, 401(k), and mutual funds. You will likely be asked to present two to three months’ of statements.

One thing a lending agent does not want to see is money being moved around a lot or accounts being transferred between banks. While you may have good reasons for doing so, the bank sees a red flag for potential fraud. Keep everything in place as much as possible and you’ll make it easier on your lending partner to form an accurate picture of your financial status.

A frequent worry for potential homeowners is whether or not changing employers before purchasing a home would affect their financial options. The honest answer? Well…it might. Whether you’re salaried or paid hourly, if you’re going to be earning more money, strongly consider it. However, while it might be okay to change jobs in those situations, it’s definitely NOT okay to change industries. Confused? Financially speaking, you’re a known commodity in your current industry. You’ve earned money in that industry and if you’re switching jobs inside of that industry, it’s fairly certain that you will continue to earn money in that specific business.

However, the above advice does not hold true if the majority of your paycheck is derived from commission or bonuses. Under those circumstances, you should stay in your current position until after you’ve purchased your home in Kansas City. The lender will determine your income by averaging your commission or bonuses over the previous two years. They will base their decision on this information.

Also, if you are a part-time employee or you’re considering switching to self-employment, you should wait to change jobs until after you’ve acquired your new home. Again, the lending specialist is looking for ways to verify your income over a period of time. Part-time employees are unable to prove how many hours they’ll be working in the new job. Persons who are self-employed need to show a stable income over a two year period.

Whether you’re ready to buy a home or just exploring your options for a future purchase, the professionals at the Urban Living Center are here to provide assistance and guidance through the entire real estate buying process.

Notice: The advice we offer are strictly the opinions of Kansas City Premier Apartments, Inc. and are intended for entertainment. Without personal knowledge of the reader's specific personal, professional or financial background, it is impossible to offer intelligent advice to the reader as an individual. As such, the author and publisher disclaim any liability, loss or risk, personal or otherwise, that is incurred as a consequence, directly or indirectly, of the use and applications of any of the contents of this article on the reader's part. If you seek legal advice please contact your attorney or for more information on contracts regarding sellers and buyers agents, please visit the Real Estate Commissions website at: http://pr.mo.gov/realestate.asp for Missouri and http://www.accesskansas.org/krec/ for Kansas.
Kansas City Premier Apartments, Inc. does not render legal brokerage of any kind in either Kansas or Missouri.