Knowledge of self is essential to living a satisfying life and being a happy homeowner. If you’ve found yourself flip-flopping between feeling ready to buy a home and not-so-ready to buy, Wyndham Capital Mortgage is here to clear up any confusion you might have with five specific signs to check off as you edge closer to getting the keys to your home.
1. You’re Ready to Put Down Roots
You might want to hold off on buying a home if you don’t plan on staying in the area for much longer, or if there’s a chance your job might transfer you in the near future. To make a solid investment as a homebuyer, it’s best to remain in your home for at least five years. You might be tempted to buy a home if a mortgage payment is less expensive than your current rent payment, but bear in mind that buying a home involves home maintenance, a down payment, property taxes and more.
2. You’re Aware of Your Mortgage Options
There’s more than one way to cook an egg, and there’s more than one way to buy a home. Options exist for 15- and 30-year loan options as well as special programs for veterans and farmers. Those who have done their research and discussed their options with mortgage experts are in a better position to buy a home than those who don’t know the full scope of their mortgage opportunities.
3. You’ve Been Pre-Approved
Realtors like working with hopeful homebuyers who have sat down with a mortgage professional to get pre-approved for a mortgage, and the same is true of home sellers. Getting pre-approved shows you have the finances and mindset necessary to not only buy a home, but have a better chance of keeping up with your monthly mortgage payments. Even better is the fact that you’re sure to feel vindicated in your decision to become a homeowner after you’ve been pre-approved.
4. You Know the Ups and Downs of Owning as Opposed to Renting
Simply because you have the financial means to buy your own home doesn’t mean it’s the best decision for you. Those who understand the advantages and disadvantages of buying as well as renting property have a solid idea of what they can expect after receiving the keys to their home. For instance, while renting can be a great option for those who move a lot or would rather not take care of maintenance issues themselves, buying offers equity as well as tax breaks. Take a look at your life, your future life plans, your desires and your career to determine whether you’ll truly be better off renting instead of buying your home.
5. Your Finances Are Ready
While bad credit won’t automatically disqualify you from being approved for a home loan, good credit most certainly has its benefits. For one thing, your home loan interest rate is sure to be lower the higher your credit score is. What’s more is you’ll have an easier time finding and being approved for a mortgage if you have superior credit.
Besides your credit score, you should also have a monthly budget set up for your mortgage. This budget should take into consideration how much of your payment is devoted to interest, principal, private mortgage insurance and property taxes. Knowing how each segment of your mortgage works and why you have to pay it shows you’re a savvy homebuyer who’s thought the decision through. Finally, setting up or planning to set up a fund for home maintenance and repairs is another sign of being prepared to receive the keys to your new home.
Use these tips and your own intuition to determine if you’re ready to become a homeowner. Feel like the timing is right? Download our First Time Home Buyer's Checklist to help you stay on track with next steps in the home buying process.