Taking the leap from renting to buying your first home is an exciting step, but there are still important factors that you should consider. After all, home ownership is a huge responsibility. When you rent, you’re supposed to be able to count on your landlord if something breaks down or needs repair. When you own a home, you’re the one who will need to maintain the yard or fix that leaky roof. So, how do you know when you’re really ready to buy a home? Here are 6 signs that might mean you’re ready for such an important first investment:
You’re Financially Secure
Steady employment is essential for responsible home ownership. If you’re still trying to figure out your career plans, or think you might move cities or states for a job soon, then it’s a good idea to wait to buy a home until after things settle down.
You Have a Solid Credit Score
The higher your credit score, the better your mortgage’s interest rate. Plus, a higher credit score makes you more likely to be approved for a mortgage in the first place. The most widely used credit score is the FICO score.
You’re Debt Free
If you’re financially secure, then you should carry little, if any, debt. Debts negatively affect your credit score, as well as your ability to manage multiple payments coming from your income at the same time.
Before buying a house, eliminate as much debt as you can. Pay down credit cards or loans, and work to remove negative marks that show up on your credit report. Every year, you’re entitled to request a free credit report from each of the major credit reporting companies. Take advantage of this and review your credit report for accuracy, as well as ways that you can improve your financial situation.
You’re Prepared for Emergencies
Since you won’t have a landlord to mow your lawn, perform maintenance, or pay property taxes as a homeowner, it’s important to have a comfortable savings for any home emergencies that might crop up. It’s also a good idea to think about what might happen if you suddenly lost your job and couldn’t pay your mortgage. In that case, you’d want to have a cushion. This is another reason why saving up for emergencies before buying a house is a smart decision.
You Can Afford a Down Payment
Separate from your emergency savings, you’ll also want to save for a down payment. For a long time, 20% was the recommended amount to save for a down payment. However, the truth is that many people put down as little as 3.5% on a house, depending on their mortgage terms. Typically, the more that you can put down, the better.
It Feels Like the Right Time
Do you plan on staying in the same city for several years? Has your family outgrown apartment living? Do you feel comfortable in your life and ready to own a home? If you feel confident that it’s time for you to move toward home ownership, then that may just be the biggest sign of all.
Are You Ready to Buy Your First Home? Contact VSells & Associates Today!
Working with a Realtor is the best way to ensure a successful home purchase. Contact the experienced team at VSells & Associates today for more information on buying a home in Maryland. You can also browse our current listings for a glimpse of what we have to offer!