Buying a home is one of the most important financial decisions anyone can make. It is called “The American Dream” for a reason, the empowerment that comes from owning a home or having a mortgage. However, this is a decision that must be taken carefully and seriously. What are the indicators that point in the direction that it is the right time to purchase a home? Take a look at these key ways to know if and when it is right for you.
Your Finances
Keep in mind that a decision like buying a home involves a process of documentation and preparation. This decision can be new to many, so it is good to know what it takes to get approved for a home loan. A good place to decide if it is the right time to buy a home is to take a look at your credit score through any of the three credit bureaus. Every mortgaging agency has different requirements with credit expectations that align with debt to income ratio, so the higher the score the better your chances are of getting approved and getting a good interest rate.
Consider your finances and make sure that you feel prepared to handle a monthly mortgage payment with insurance and other fees involved. The first place to prepare for all of this is to have a full-time job with a consistent income that can be segmented into saving up for a down payment, which can range from 3.5% – 20% depending on if it is a government-backed loan. All of this can be discussed with a licensed loan officer.
Your Future
Now that you have a high-level idea of what it takes to be prepared to invest in a home loan, another important piece of this puzzle to consider is where your future lies. Do you and your family anticipate living in the same general area for the next seven years? Jobs can result in relocation and may make it difficult to own a home. Another thing about the future to consider if potentially growing the size of your family with children or other family members.
Whatever the size of your family, this is important to analyze while deciding if it is good timing to purchase. Owning a condo over a house has benefits for those who aren’t used to a large space. A condo can also be a good option for first time home buyers due to lower cost, all depending on location and market.
Your Responsibility
Like many things in life, ownership requires responsibility. In this process of deciding if becoming a homeowner is right for you take the time to educate yourself on what is involved in the home buying process and if this is a responsibility that you are up for. Become familiar with the risks and benefits of being a homeowner and allow this to guide your decision if this is right for you.
The decision of becoming a homeowner is exciting and can even be scary. Taking the time to carefully prepare will be one of the most important steps to truly be ready when the time comes to start house hunting. Making the decision to own a home can be major in a positive or negative way, and educating and preparing yourself will be key to ensuring a good experience when those keys are in your hands.
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