Buying your first home is one of the most significant landmark events in anyone’s life. As a massive financial decision, you don’t want to commit to purchasing a property if you aren’t yet entirely ready for the financial commitment.
However, financial commitment is not the only important factor when investing in your first asset. Various factors will determine whether you are ready to purchase your dream home. To avoid later finding yourself burdened with a mortgage loan you can’t afford or a property that’s gradually falling apart faster than what your budget can manage, you should first acknowledge these five signs that you are definitely ready to buy your dream home.
Your Financial Health Is In Excellent Order
When establishing the condition of your financial health, you will need to weigh in factors such as your credit score, how much debt you have, and how much credit you have available. You won’t be able to lie to the bank when applying for a mortgage loan, so it is best to determine your financial health before applying for a mortgage loan.
Because a mortgage loan is a substantially large amount of credit, your credit score should be quite high, as a low score of about 600 won’t get you approved by any lenders. And even if you find a lender willing to take a chance, you may not be able to manage the credit. So, before applying for a mortgage loan, make efforts to pay off as many debts as possible and other efforts that will boost your credit score.
You Have A Down Payment
A down payment is the amount of money you will put towards the mortgage loan, and the more you pay, the less you will need from a lender, which will heighten your chances of approval. With that said, it is improbable that you will be approved for a home loan without any sort of downpayment. In most cases, your down payment should be at least 10% of the mortgage loan amount you are applying for. If you have a downpayment and your financial health is in good order, you can apply for pre-approval for a home loan and then start searching for your dream property.
While you will first need to find your dream home before you can apply for the loan, you should consider a Pembroke pines realtor to help you find your dream home that is valued at an amount you have estimated for affordability. Opting for a realtor will reduce your chances of purchasing a home in a shabby neighborhood or a home with underlying issues, as an expert realtor will determine the best candidate homes while considering your budget and expectations.
You Really Can Afford The Repayments And All The Extra Hidden Costs
It will be relatively straightforward to determine if you can afford the mortgage repayments after calculating a budget. However, other hidden costs involved in buying a home that most first-time buyers aren’t always aware of. These extra costs can include the transfer fees, property insurance, property taxes, homeowners association fees, city assessments, water/sewer/garbage removal, and utilities.
So be sure you have calculated all the extra costs associated with purchasing the property you have your eye on before signing any paperwork that solidifies your decision. If you are considering purchasing a starter home instead and later buying the home of your dreams, you may find a starter home is more affordable. However, there are also downfalls involved in this decision. Most first-time buyers are recently opting out of the decision to buy starter homes as waiting a bit longer to afford their dream home is more plausible in terms of overall affordability.
You Are Ready To Settle Down
You might feel ready to settle down, although various aspects will prove if this is true. It is best if you determined how many job changes you have had in your career that required you to move to a new home, how often you have moved to a new home for other reasons, and how stable your income has been on average for the past five years. These factors will prove that you are ready to settle down in your forever home or if you should continue to rent for a while longer.
You Can Afford Home Maintenance
While some aspects of home maintenance should be tackled with a DIY approach, such as fixing a leaky tap, cleaning out gutters, and various others, some should be left to the professionals. So you should be able to manage DIY maintenance with ease, as not being able to change light bulks and tighten leaky taps means you have a little way to go before investing in a property of your own.
At the same time, you should leave home maintenance such as roof repairs, cracked walls, plumbing issues, and electrical issues to professionals. With that said, you must afford these service costs as avoiding them will soon have your asset turn into an unbearable burden. So be sure to budget for these costs by assessing a home maintenance checklist and evaluating the frequency and costs of each service.
Getting Ready To Buy Your Dream Home
Once you meet the quota to purchase your dream home, the next phase of the process can begin. It is best to first apply for pre-approval before you start house hunting with the help of an expert realtor. After you have found your home and are ready to purchase, you should negotiate the asking price. There are a few other steps in the process before the big day arrives that you can move in.
However, it is essential to rely on a realtor as doing it on your own could have you overpaying for a home while the process will also likely be longer. It is also best to shop around instead of feel lured by the first home you view. Most interested buyers will shop around online before narrowing down their selection.