Buying a home is a major decision, and you want to make sure you are ready before diving right in. Here are eight signs that you’re ready to make the switch from renter to homeowner.

  1. You’re tired of rising rent prices.
  • Increasing rent rates makes formulating a budget extremely difficult, and even harder to save for other financial goals
  • You want to be building equity for the future, not pouring money into a bad investment month after month.
  1. Your credit score has improved.
  • Improving your credit score will help you qualify for a mortgage
  • You won’t require as large of a down payment
  • The better the score the better the interest rate and loan terms in general
  1. You’re good at managing debt.
  • Keep in mind your debt-to-income ratio: add up all of your monthly expenses and debts and divide by your gross monthly income
  • Most lenders require a ratio of no more than 43%
  • Some conventional loans allow up to 50%
  1. You have enough set aside for the extra costs of owning a home
  • Make sure you are thinking about emergency funds for unexpected expenses
  • Budget property taxes and routine maintenance costs
  1. You can afford the down payment and closing costs.
  • Most conventional loans require a 5% down payment
  • Some FHA loans, mortgages insured by the Federal Housing Administration, require only 3.5% down
  • Closing costs could be another 2-7% of the property’s sale price, but this can sometimes be negotiable
  • Search for grants and other loan programs, or better yet contact us to find a loan officer to find what will work best for you
  1. You’re ready to settle down in one place.
  • With all of the upfront costs, you want to make sure you will be happy where you are settled
  • Having job security is key, as you don’t anticipate moving in the next few years.
  1. You’re going through a major life change.
  • Getting married, having a growing family, or getting a new job make for common incentives to prospective homeowners
  1. You know what you want.
  • Is there a specific neighborhood or school district that you want to live in?
  • Think about the different types of homes: houses, townhouses, condos, etc. 

Ready to leave renting behind?

Contact us to find out what’s next! Call Michael Olear at 418-9959 any time for a free consult or assistance with real estate related questions.