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5 Important Questions When Choosing Your First Home

Choosing Your First Home

Moving into your own place can be exciting and frightening at the same time. Consider the following five questions when choosing your own home:

1) How much money have you saved? Evaluate your financial health and figure out how much you have saved for a down payment—typically 5 to 20 percent of the price of the home. But be sure to keep enough in savings for an emergency fund—it’s a good idea to have three to six months of living expenses to cover unexpected costs and circumstances.

2) How much debt do you have? Consider current and expected financial obligations—such as your car payment, insurance, credit card debt and student loans. Ensure you will be able to make all the payments in addition to the cost of your new home. Aim to keep total mortgage payments plus utilities to less than 25 to 30 percent of your gross monthly income. Recent regulatory changes limit debt-to-income (DTI) ratio on most loans to 43 percent.

3) What is your credit score? Both renters and homebuyers can expect to have their credit history examined. A high credit score indicates strong creditworthiness while a low credit score can keep you from qualifying for a low interest rate on your mortgage loan. If your credit score is low, you may want to delay moving into a new home and take steps to raise your score. Busey offers tips to improve your credit score.

4) Have you factored in all the costs? Create a hypothetical budget for your new home. Find the average cost of utilities in your area—including gas, electricity, water and cable—and find out if you will have to pay for parking or trash pickup. Consider other basic maintenance costs like maintaining your yard and replacing the air filter every three months. Factor in real estate taxes, mortgage insurance and possibly a home owner association fee.

5) How long will you stay? Generally, the longer you plan to live somewhere, the more it makes sense to buy because your home will build equity over time. Carefully consider your current life and work situation and think about how long you want to stay in your new home.

Partner with Busey for the resources you need to achieve your dream of homeownership. Our in-house mortgage expertise and participation in a wide range of programs mean your home loan is tailored to your individual needs. Apply online today in 20 minutes or less at buseymortgage.com.

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With five lines of business—personal, mortgage, commercial, cash management and wealth management—working together as One Busey, we can meet all your financial needs with confidence. Customers who partner with us are rewarded with the Busey Advantage—regional capabilities and local priorities. It's a commitment that has stood the test of time.

On the personal side, Busey Bank promises to make your banking hassle free with smart personal checking and savings accounts, convenient online banking and mobile banking solutions and consumer loans. Whether you are ready to buy your first home or simply want to refinance the one you currently own, our practical home mortgages, participation in a wide range of special loan programs and in-house mortgage expertise mean your home loan is tailored to your individual needs.

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You've earned it. We'll grow it. Busey Wealth Management provides asset management, investment and fiduciary services to individuals, businesses and foundations. We build a team of local professionals around your needs to establish the best strategy for your situation. We work closely with you to develop a personal, comprehensive plan that will help you meet your goals and objectives through each phase of the wealth management process.

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