Buying a home is one of the biggest decisions most people will ever make. It’s a commitment that requires research, forethought, and a lot of financial planning. Knowing when you’re ready is an entirely personal decision, but it doesn’t have to be subjective.
Here are a few signs you may be inching closer to the decision to buy your first house…
Of course, being stable financially is the #1 precursor to buying a home. It’s important to have a steady source of income as well as a handle on any outstanding debt – mortgage lenders will want to know everything from your student loan payments to your tax write-offs before giving you a loan. In fact, most major lenders require those with less traditional streams of income (i.e. freelancers, all-commission salespeople) to have at least 2 years of stable W-2 income before they’ll even consider a loan.
YOUR CREDIT IS GOOD
You don’t have to have perfect credit to buy a home, but the better your score the better your APR is likely to be. A good credit score is a sign you’re responsible enough financially to manage the burden of a mortgage, both to lenders and to home buyers themselves. Of course, there are all kinds of loan packages available to people who don’t meet traditional requirements but be very wary of any deal that seems too good to be true and always talk to a financial adviser before signing.
YOU’RE STAYING PUT
The general rule in home buying is that purchasing a home is a safe financial investment only when you know you’ll live there for 5 years or more. There are exceptions to this rule in every state but if your job’s in flux, you may need to change school districts, or you’re just not sure you like the neighborhood, consider waiting a while to dive into a home.
YOU’VE DONE YOUR RESEARCH
Say you happen to wander into a beautiful open house one Sunday and you fall in love…this could be your first home! Never let home buying become an overly emotional experience and be sure you do thorough research on the area, other homes for sale, and mortgage rates before you pen an offer. On average, a home buyer spends 12 weeks searching for a home before finding the right one, looking closely at at least 10 homes before buying.
YOU HAVE THE CASH FOR A DOWN PAYMENT
Typically a 20% down payment is needed to secure a traditional home loan. There are packages available that don’t follow this guideline but if you’ve got enough money to put down 20% odds are you’re in a good position financially to invest in a home. Never, ever “stretch” yourself to buy the perfect house – don’t scrape together an extra few thousand to have enough for the down payment only to find yourself struggling each month to meet the mortgage.
YOU CAN HANDLE THE COSTS
Home ownership comes with all kinds of costs renters are simply unaware of. Even brand new homes will need maintenance every month – lawn care, trash pickup, cleaning services. Be sure you’re ready to handle the sudden onslaught of bills from a plumber or the cost of a broken fridge. Research different home options; condos typically cost less to maintain than single-family homes. Buying a home means becoming your own landlord which requires dedicated time and money.
First time home buyers account for over 39% of all home sales in the US each year. While 51% of these buyers are married couples the single buyers account for over 36% of the remainder.
If you’re interested in discussing the options for your first home, contact On the Move Charlotte today! We’ve been successfully representing first-time home buyers in the Charlotte area for years.
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