Buying a home is one of the most important and biggest investments you will make in your life. That said, it’s also a major leap you want to be ready for. There are many things to consider when you decide to buy a home like getting approved for a mortgage, affordability, unforeseen expenses and more. So, how do you know when it’s the right time? Here are five key signs that you’re ready to buy a home:
1. You have a secure job with steady income
Whether you’re working full-time, on commission or you’re self-employed, having a reliable job with steady income brings financial security and is one more reason you’re ready to buy a home. Your home search, affordability and your ability to get a mortgage rely heavily on your earnings. While any job comes with uncertainty, being confident and comfortable in your employment is a key indicator that you can take on this type of expense.
2. You've saved up for a down payment
If you are financially ready to make a strong down payment from the get-go, you can be sure that purchasing a home will be a manageable investment. The more you can put down, the lower your monthly mortgage payments will be. Calculate your monthly mortgage payments and discover what you can afford using our mortgage calculator.
3. You have little to no major debts
Clearing your credit card debt and/or paying down any outstanding car loans is one more step you can take to ensure you’re financially stable to make this purchase. Your debt-to-income ratio, a measure that calculates your debt divided by your monthly income, is a major factor lenders consider when reviewing your mortgage application. Not to mention, the additional expenses that come with buying a home such as property taxes, insurance and furnishing. Eliminating your debt will allow you to take on these additional costs and at the same time, make the homebuying process a lot less stressful.
4. You’re ready to settle down long term
Purchasing a home is a long-term investment. If you see yourself staying in the same town or city for more than a few years, then it’s definitely a sign that you are ready to buy. Traditional mortgage terms range between 25 to 30 years. So, if you’re serious about getting in the market, you should plan on living in the home for at least five years in order to benefit from the investment financially.
5. You’re able to afford the home you want
Before purchasing a home, it’s important to set realistic expectations and have a clear understanding of what you can afford. This is a good indicator of whether you should move forward in buying a home or continue saving for a down payment. A great way to learn your affordability is by getting pre-approved for a mortgage. Getting pre-approved will help you make an informed decision by giving you a clear view of what you can afford with the down payment you’re able to make.
If you are able to answer “yes” to all of these signs, then a great next step is learning what you can afford and getting pre-approved for a mortgage. Apply online with our team at Homewise today in just five minutes and one of our Mortgage Advisors will get in touch and answer any questions you may have.