7 Signs You’re Ready to Buy Your First Home
Buying your first home is probably one of the most difficult and most expensive purchases you’ll make in your life. But if you make the right choices, plan ahead, and understand all your options, it should be one of the most infrequent purchases you make.
Just because you think you are ready to take the plunge and purchase a home doesn’t mean you are. Buying a home takes financial and emotional responsibility that you made have never had to have before, so it is important to make sure you’re fully committed to homeownership before you prepare to purchase. Here are a few signs that you might be ready to take the first steps to becoming your own landlord:
- You plan to stay in the area for a long period of time. If you’re planning on staying where you are for at least five years or more, it could be the right time to purchase a home. Often, mortgage payments can be similar or less than rent, so buying a home can save you money.
- You have a nest egg saved up. You should not only be saving for a down payment, but also for an emergency fund, moving expenses, and home maintenance costs. The more you’ve saved, the more serious you are about owning your home.
- You have a reliable source of income. Buying a home is a long-term financial commitment, so you want to make sure you are in the position to continuously make your mortgage payments.
- You have your debts under control. Your debt-to-income ratio is very important. Lenders want to make sure monthly housing costs (loan principal, interest, taxes and insurance) don’t use more than 28-33% of your monthly gross income and that your total debt (mortgage, credit cards, student loans, and car loans) stays less than 38% of your total pay.
- You have good credit. Good credit is an important factor in the home purchasing process. The higher your score, the more likely you are to be approved for a loan. Great credit will typically get you a lower interest rate and a lower monthly payment.
- You’re prepared for the ongoing costs of homeownership. Purchasing a house is just one aspect of the cost of owning a home. If you’re ready to take on other expenses besides a mortgage – higher bills, homeowner’s insurance, property taxes, maintenance and upkeep, you could be ready to purchase your first home.
- You’ve been preapproved for a mortgage. The first step to buying your own home is being preapproved. Many real estate agents prefer you to be preapproved before you start looking at listings.
Contact a Mutual of Omaha Mortgage specialist today to learn if you prequalify today!