9 Signs You’re Ready to Buy Your First Home
Purchasing your first home is a big deal. You’re about to spend more money than you ever thought possible. Knowing if you’re ready to buy your first home can be confusing. So, if you’re thinking about purchasing your first home, here are some simple guidelines to help you decide whether you’re ready:
You’re Thinking in the Long-Term
If you’re planning to stay in the area for a minimum of five to seven years, you are on the right track. You need to stay that long in order to recoup your buying and selling costs. If you’re looking for something temporary, buying may not be for you at the moment.
You’re Ready to Buy, but Able to Wait
You want to have enough time left on your lease (or be able to move to a month-to-month lease) to look for what you want. You also allow time, in case your first offer or two aren’t accepted, or if you lose a bidding war. If you’re in too much of a hurry, you may compromise on things you didn’t plan for.
You have a Reliable Income
Thinking about a career change? You may want to make sure you’re in a job you plan to stay at for at least the next five to seven years. A reliable income is essential to home ownership.
Your Debt Is Under Control
It’s safer if you have all debt paid off before considering home ownership, but it’s not a requirement. Be aware that your debt isn’t going anywhere – it will only grow when you add a mortgage. So, make sure you have a handle on your debt. Also, possibly a solid plan in place for paying off your debt in a reasonable amount of time.
You have a Budget in Place and Use It
Be sure you not only have a budget, but you use it competently. If you don’t have a budget, create one. Knowing where you money goes will help you know what you can afford for a mortgage.
Your Credit Report is Good
Your Credit Report is one of the biggest contributing factors for your interest rate for your mortgage. Make sure all your information is correct and that you have a good credit score. Your Credit Report largely consists of your credit payment history, but the information compiled will also consist of your present and past addresses, the total debt you currently carry, what sort of debt it is, lender names, your debt payment history, and a few other pertinent items.
Check the report before applying for a mortgage – if there are mistakes, it could hurt your credit score. If you find an error, you need to write to the credit bureau and describe the issue. They will investigate the problem, usually within 30 days, and send a confirmation of the corrections.
Your Down Payment and Emergency Funds Are Saved
Having a down payment isn’t the only money you need to have ready to go. Many first time home buyers don’t think through the update costs and the possibility of something needing repair right away. You may be able to get by for a time, but before too long, you’ll need some extra money to update your new home.
You’re Prepared to Be Your Own Landlord
If it breaks, YOU fix it. Be ready to take on the joys and responsibilities of owning your own home. In a rental property, if something breaks, you can call someone else to fix it. If the grass is getting long or there’s snow on the sidewalk, you can bet someone will be along shortly to take care of it. When you own your own home, that person is you!
You’re Ready to Research the Home Buying Experience
If you have friends or acquaintances who have bought a home, ask questions! They will likely have some sound advice that will aid you in the home buying process. Know what to expect, what to look for, questions that need to be asked, and have a list of wants and compromises.
If these all sound like things you’re prepared for, you may be ready to purchase your first home! Contact us today and we’ll help you find the right home for the right price.