If you are renting an apartment or a home, you may feel like you are throwing money away month after month. But how do you know if you are ready to buy a home? There are many factors that go into what will be one of the biggest decisions of your life, and here are 3 signs that you may be ready to start looking for your first home.
1. Are you ready to commit? Buying a home encompasses many different types of commitment. While people don’t usually spend the rest of their lives in the same home, they typically spend 5+ years in a house. If you have been in your current location for several years you may be ready to choose a long-term location. Also, realize you are committing to the care and upkeep of your home. If you find yourself completing small repairs and improvements around your current space, you are definitely ready to care for your own home.
2. Are your rent costs close to or larger than a mortgage payment would be? If you are spending close to what a house payment for your area, (taking credit, available loan programs, and other factors in to consideration) perhaps you are ready to purchase a home. When you purchase a home, you are building equity that will benefit you in the future. When you are paying rents, you retain no benefit and build no value. Talk with a qualified Loan Officer to see what your mortgage payment would be. If your rent is equal to or greater than a payment on a similar sized home, you may be ready to buy.
3. Do you have money in the bank? I am not talking about a few dollars left over at the end of the month. If you have been saving and have amassed more than just an emergency fund you may be ready to buy a home. While most home purchases do require some type of down payment that you would need money for, the larger factor is that you are in the habit of living within your means and saving money. Buying a home is a large investment that you will be paying on over time and strong money management skills are a great sign you are ready to take the next step.
If you answered yes to one or more of these signs the next step will be speaking with a qualified Loan Officer and looking at all your options.