Home Mortgage Blog
4 Signs You Are Ready to Become a Homeowner
Becoming a first-time homeowner can seem intimidating and many would-be buyers struggle with knowing when the time is right. When it is right, buying a home can be a smart and exciting investment in your future. Although every situation is different, there are a few indicators that can help you determine if you are ready.
You Have Reviewed Your Budget and Can Afford a Mortgage Payment
In many cities, a mortgage payment is comparable to the cost of renting. However, that is not always the case. Take a look at the type of properties you are interested in owning and use a simple mortgage calculator to determine the estimated monthly payment. How does it compare to your current cost for housing? Is it within your monthly budget? If so, choosing to buy will help you build equity, rather than simply spending money on rent each month.
You Love Your City and Plan to Stay There A While
The benefits of buying are significant if you plan to own your home for more than a few years. However, buying and selling under the two-year mark could potentially eliminate the financial benefits that a long-term buyer would see. If you intend to be in your current city for the foreseeable future, it’s great to consider buying rather than renting.
You Know Your Credit Score and Have Addressed Any Issues
Before you begin your house hunt, it is important to know where you stand financially. As a first step, you should be meeting with a Loan Officer to review your credit score and debt to income ratio to determine if there are any problems that you should address. Fixing or improving your credit score can have a dramatic impact on the interest rates available to you, saving you thousands of dollars in the long-run.
You Have Built Up Your Savings
Although it is a myth that you need to have 20% down in order to buy a home, it is important to have a nest egg ready for the costs associated with both the down payment, transaction, move, and any unexpected costs. When you’re a first-time homeowner, your Loan Officer understands and can review your goals and help you create an estimate for how much you should have saved. Regardless, if you think you may want to buy a home in the future, it is never too early to start setting money aside.
Contact Marketplace Home Mortage with any questions about being ready to purchase your first home.