If you’ve been questioning whether or not you’re ready to buy your first home, it’s important to first make sure that all of your finances are in order and that your lifestyle is suited to be a first-time home buyer. Here are five signs that you may be in a good position to buy your first home:
- You have money saved for a down payment
Out of all the up-front costs that come with purchasing a home, the biggest is the initial down payment. Typically, the down payment costs between 3%-20% of the total purchase price depending on which type of mortgage financing you decide to get. Therefore, it’s extremely important to take the cost of the down payment into consideration first for your future home. Closing costs, insurance, taxes, and money for repairs can also add unprecedented costs so make sure that you can afford a down payment that additionally allows breathing room for any upgrades or extra costs after your home purchase.
- You have a good credit score
While you don’t have to have a perfect credit score, it’s important to have most of your debt paid off and a good credit score in order to qualify for more ideal interest rates. Qualifying for better interest rates ultimately allows you to enjoy a lower monthly mortgage payment which also makes being a homeowner more affordable overall.
- You have steady income
A consistent and steady source of income prevents you from putting yourself in a situation with financial vulnerability. While there are always uncertainties with jobs, the longer you have maintained a business or position, the more likely you are to have your income viewed as steady which can help tremendously when beginning the home ownership process.
- You can afford a mortgage payment
It’s important to take into consideration, beyond the initial down payment and other expenses, that your monthly budget can afford a mortgage payment as well. It’s typically recommended that you spend no more than 30 percent of your monthly income towards your mortgage payment. While it’s entirely up to the individual how much of a percentage they want to put toward a mortgage payment, 30 percent leaves room within your budget for other monthly expenses without putting you in a tough financial situation.
- You plan on living in a location long-term
Purchasing your first home is a major investment which is why it’s significant to know that you’re not planning on moving to another location any time soon. While you don’t have to stay in one location forever, it’s typically suggested to remain at your new home for 5 to 10 years in order to get the best return on your investment.
Overall, if you see yourself living in a certain city for awhile and have all of your finances in order with a steady income, then the opportunity to become a first time home buyer could be perfect for you! It’s also extremely important to work with a reliable mortgage broker such as HomeRate Mortgage because we offer quick quotes, low rates, and fast closing times. Call us at 844-805-9100 for more information or fill out this form for a quick quote.