Serving Ohio, Florida, Kentucky, Tennessee & Virginia

Not intended for Idaho, Washington, or Alaska consumers

# Our guide for a first-time home buyer

You have decided that you are ready to own your own home. Congratulations on taking this big step! Buying a home for the first time can feel like a daunting process and you will have plenty of questions to ask yourself along the way. There is no wrong way to begin buying your own home. Have you already found the home of your dreams, but need to go through the process of purchasing it? Are you looking to plan financially before beginning your search for a home? Or perhaps you are not sure where to start when buying a home. Polaris Home Funding is here to help with our First-Time Buyers guide.

## What are the stages of buying a home?

### Selecting a realtor

In order to determine how much you can afford to spend on a house, you and your lender will look at your debt-to-income (DTI) ratio. If your ratio of debt per income is too high, you are more likely to not be able to make your mortgage payments and may default on your loan. Your debt-to-income ratio is calculated by adding up monthly payments (such as student loans, rent, credit card payments) and dividing this sum by your pre-tax income. The number you calculate is your percentage of debt to income. Ideally, loan applicants will have a percentage of less than 50% (0.5). If your number is on the higher end, consider options to pay down some of that debt and how a mortgage payment will affect your budget before applying.

### Determining your budget

In order to determine how much you can afford to spend on a house, you and your lender will look at your debt-to-income (DTI) ratio. If your ratio of debt per income is too high, you are more likely to not be able to make your mortgage payments and may default on your loan. Your debt-to-income ratio is calculated by adding up monthly payments (such as student loans, rent, credit card payments) and dividing this sum by your pre-tax income. The number you calculate is your percentage of debt to income. Ideally, loan applicants will have a percentage of less than 50% (0.5). If your number is on the higher end, consider options to pay down some of that debt and how a mortgage payment will affect your budget before applying.

### Credit Score

In order to determine how much you can afford to spend on a house, you and your lender will look at your debt-to-income (DTI) ratio. If your ratio of debt per income is too high, you are more likely to not be able to make your mortgage payments and may default on your loan. Your debt-to-income ratio is calculated by adding up monthly payments (such as student loans, rent, credit card payments) and dividing this sum by your pre-tax income. The number you calculate is your percentage of debt to income. Ideally, loan applicants will have a percentage of less than 50% (0.5). If your number is on the higher end, consider options to pay down some of that debt and how a mortgage payment will affect your budget before applying.

### Mortgage Lending and Pre-approval

### House Hunting

### Gathering necessary documents and Down Payment

### Making an offer

### Closing on the house