Signs You're Ready to Buy Your First Home
Ever had a friend who was the life of the party? You know the type, fun, loud, felt like when it came to the game of life, he had won the charisma jack-pot? Back in my old college days, that used to be Party Pete. If there were fun to be had, he would be leading the charge. A few years after graduation, he decided to start his own business. Vows were given, and promises were made that nothing would really change...I haven't seen him in years. How do the past adventures of good old Pete equate to homeownership, I hear you cry? Let's take a small philosophical leap together. At the heart of it, life is about progress and change. What more significant step can one take than to buy a new home? But how do you know when is the right time? We have provided a list of sure-fire signs you're ready to buy your first home for your perusal.
If you Want to Put Down Roots, You First Need to Put Down Some Money
Your finances will ultimately play a large role in your decision to purchase a home of your own. This will be one of the most significant financial decisions of your life, and you need to be prepared. One of your first considerations should be if you have enough for a down payment. This is the highest up-front cost you will encounter in the home-buying game, and it is a crucial one. It is possible for the down payment to be as low as 3%, but 20% is the magic number you should be aiming for. Once you reach 20%, you no longer need to pay private mortgage insurance. The higher this initial payment, the lower the interest will be, making your post-purchase financial position that much stronger. However, as is always the case with finances and economics, there are additional variables to consider.
Having savings in the bank, preferably a real one, not the piggy variety, is one of the signs you are ready to buy your first home
Job Security Secures a Home
A stable job is another important sign that points to you being ready to buy your first home. Bank statements and tax returns dating back a couple of years will also help boost your potential lenders' confidence in your ability to cover your new financial obligations. If you know that you can rely on a steady source of income in the years to come, you are one step closer to the purchase.
Low Debt is one of the Signs You're Ready to Buy Your First Home
Debt - find one person who likes that word, and I'll cover your first mortgage payment immediately. As unappealing as the term is, it is important you have this financial aspect of your life under control before considering buying a home. Too much debt is like a red flag waving wildly in the wind; it leaves mortgage lenders with a bad feeling in their stomachs. Your credit score could plummet if you have a history of poor debt management. It is no secret that getting a home mortgage can be tricky, so you need to accrue all the advantages you can. Those with no, or very little debt, are those who are one step closer to being ready to make that fateful step towards homeownership.
Somehow, you feel it has all been leading to this. That's because a lot of what we have mentioned affects your rating. Your credit score, in turn, affects how eligible you are for a more affordable interest rate. Simply put, the higher the credit score, the lower the mortgage rate. Sounds similar to something we mentioned way back in paragraph two, doesn't it?
Also, did we mention it is a prerequisite for being approved for the loan itself? Yep, this is an important one.
Make sure your coffee stays in your cup and off the furniture by understanding, beforehand, the process and everything it entails financially
It's Not All About the Money
Financial responsibility plays a big part, but there are many other factors that determine if you are ready to purchase a house. Let's take a look at them, shall we?
- You plan on staying put- You are happy where you are and are not planning on moving any time soon. A good rule of thumb is that if you are planning on moving in the next three years, best to hold off on buying a house.
- You need more space- This usually means you are planning a family or have kids on the way.
- Eternal Tenant Syndrome- Ok, that's not really a thing, but you get the gist. If you are tired of renting, buying a home is the logical solution. It is an investment and makes sense long term. Paying rent after retirement can present quite the financial strain...one that should be avoided if possible.
- The handyman can- If you have a toolbox and know how to use at least half of its contents, this could be one of the signs that you are ready to buy your first home. A lot of homeowners even have a home maintenance calendar that helps them stay on top of things. Remember, there is no landlord to call when something breaks down, so knowing how to fix things can come in quite...handy. Sorry, I couldn't resist that one.
It could be a sign that you are not ready for this step, if you are not quite sure what these letters stand for
You Check All the Boxes? Let Us Give One Last Piece of Advice.
If you feel like you meet the criteria, so to speak, then prepare to take the plunge and buy your first home. There is, however, one potential problem that could pop up. Do not fret; you can solve it easily. Once you receive the keys to your new house, you need to move into it. This can be tricky, depending on how many belongings you are transporting. That's why it's essential that you find the right moving company to help you out. By carefully combing through the database of moving professionals at Verified Movers, however, you can find the perfect fit for you! Just make sure to start packing on time, as you don't want to rush it all in a couple of days.
Tying Loose Ends
For those of you who have stuck around until now in your desire to find out what happened to my old buddy, I'll tell you. I met up with Pete a couple of years back, and he is as happy as he has ever been. See, even though he gave up a lot, what he got in return far surpassed all of that. The same goes for homeownership. Are all the signs you're ready to buy your first home there? If you know you have the financial stability and emotional maturity needed for it, there is no reason it will not be one of the best decisions of your life. The final step is to find that ideal property. There are plenty of tips you can employ when searching for the perfect home; you just need to be thorough. So go out there and find an exquisite property to call your own and enjoy an excellent life in your beautiful new home.