Think you’re ready to purchase your first home? Well – not so fast, champ. First, let’s look at some of the signs that show you’re ready and able to buy your first home.
Sign #1: You Don’t Have Debt
Table of Contents
For many Americans, debt is a major hurdle that needs to be overcome before even considering buying a home. To get to the point where you’re ready to buy a house, you might need to get rid of your outstanding debts, such as your student loan, credit card debt, and auto loan. Once those loans are out of the way, you’ll have more liquidity to deal with the extra expenses that come with owning a home.
For example, you’ll be on the hook for property taxes, insurance, repairs, furnishings, and maintenance or repair costs – just to name a few!
Sign #2: You’ve Researched Your Financing Options
- VA loans: Private lenders give out these home loans, but the U.S. Department of Veterans Affairs backs the loans themselves. So, who qualifies for a VA loan? Homebuyers who are either activity duty or veteran may be able to get a VA loan. You must have to have a Certificate of Eligibility (COE) and meet other specific conditions. However, if you get approved, you can purchase a home with $0 down. Credit score and credit history requirements are also much less stringent compared to traditional mortgages. In addition, VA loans don’t require private mortgage insurance or PMI, which can add up for those who can’t put down 20%.
- Conventional mortgages: Traditional mortgages are the most popular type of financing. Regular mortgages require good to excellent credit and larger down payments, however.
- USDA loans: The US government might provide help if you want to buy a home in a rural area with no money down. To get this loan, you’ll need to be buying a property in qualified areas of the U.S.
- FHA loans: Just like VA loans, FHA loans let people buy a home with a smaller down payment and less-than-perfect credit. However, the terms and conditions aren’t as great as a VA loan – so if you’re a veteran, check out your VA loan options first.
- Native American Direct Loans: If you’re a Native and a veteran, you could be qualified to buy a property on federal trust lands. If you have a spouse who is Native, you also might be eligible. These loans are distributed directly from the government.
Sign #3: You Want to Settle Down
Maybe you’re someone who thought you’d never say the words, “settle down,” and mean it seriously. But wanting stability and a sense of permanency is something that most people eventually want. If you’re ready to grow your roots in a particular community, it’s a good idea to start house hunting. If you think you’ll move soon, it’s obviously a bad idea to go through the hassle of buying a house.
Most mortgages offer 30-year terms, so if you’re still feeling the itch to travel or not be tied down, a house might not be a great option as an investment. But if you want to put down roots, it’s time to start house hunting!
Sign #4: Your Finances are in Order
Is your credit score finally looking good after years of on-time bill payments? Do you have an emergency fund that you’re proud of? Do you have a significant amount of money stashed away that you can use for a down payment? If this is all true, then you’re probably ready to tackle the house-buying process.
Another related sign is that you have stable employment with a predictable rate of increase. If everything in your personal life related to money and your future goals are aligned and stable – you’re in great shape.
Takeaways: When Is the Right Time to Buy a Home
When you’re trying to determine whether or not you should buy a home, it can be a little confusing deciding whether or not you’re actually ready for it. But, if your debts are paid off, and your emergency fund is healthy, those are signals that you are ready to buy a home. Make sure you do your homework when it comes to financing your house and know all the lingo and steps you need to take before you attempt to purchase a property. With these tips, you’ll have your new set of keys to your dream home in no time at all. You are ready to purchase your first home!
Featured Image by Schluesseldienst from Pixabay