Buying a home will be one of the largest purchases you make, so it's important to be ready to take on this financial responsibility before you jump into it. While no two set of circumstances are the same and different people are ready to buy at different times, there are some common indicators that can help you decide if now is the right time for you to buy your first home.
Keep an Eye on Your Credit Score
Knowing when to buy a home can be determined from a few different factors. The first is whether or not you have good credit. The days of easy credit lending are long gone, and having good credit is necessary to obtain a mortgage. If your credit is less than stellar, consider working on improving your credit score before attempting to purchase a home. It can save you a lot of frustration in the long run.
Have a Stable Income
Many mortgage lenders will want to see that you have a stable work history and will be able to continue making your monthly payments in the long run.
Save for Your Down Payment
Next, almost all mortgages require some type of down payment. A down payment can be as high as 20 percent of the purchase price; however, there are different options available depending on the mortgage product and qualifications. You will need to have money set aside for a down payment, so saving should be a priority before starting the home buying process.
Also, you will need to have complete documentation of your financial history. This may include other loans, credit card balances and pay stubs. Having all of this prepared ahead of time can help save you from issues down the line.
Determine if You're Ready to Settle Down
Finally, you'll want to ensure that you are ready to settle down and live in the neighborhood you've selected. Moving once you own a home is much more difficult than moving when you're renting. Also, you'll want to consider how your family will change over the coming years and if this home and this neighborhood will be good for the entire family five or even ten years from now.
Deciding when to buy a home requires some thought and planning if you want the process to go smoothly. However, with a little forethought and research, you can be sure you're ready to purchase before you do so. For more helpful information about being ready to buy a home and the home buying process, download our eBook now!