5 Signs That Mean It’s Time To Buy Your First Home
May 14, 2021
Buying a home is the first step to financial freedom for many. However, we often see people actually buying property without proper planning or preparation, which ends up becoming an enormous headache in no time. There’s nothing wrong with buying a home, but you should be absolutely certain that you are ready to buy one.
How to determine if you’re ready? Well, here are five signs that will help you decide:
Five Signs That You Are Ready To Buy a Home
- You Have A Good, Steady Job
Having a stable source of income is the first real sign that you are ready to buy a home. Now, what does a steady or stable source of income mean?
Well, it means that:
∙ you have been employed for the last two to three (at least) years
∙ you have been seeing a growth in your income
∙ you anticipate even more financial growth in the coming years as well
All of these are signs that you have landed in a place in your career where you see yourself growing and laying down roots.
- You Are Debt Free
Are you debt-free?
If the answer to this question is a yes, then it is the second vital sign that you are ready to buy a home. Living debt-free often is an indication that you will have a decent credit score. This implies that you can easily get a loan for the property.
It is also common for people who aren’t debt-free to buy a home. In this case, it is important to make sure your debt to income ratio is lower than 43%.
- You Have A Good Credit Score
As mentioned in the last point, living debt-free is a sign that you have a good credit score. What does a good credit score mean?
Ideally, a score of anything above 700 is considered to be good. You can use online resources to check your credit score or visit a financial advisor. Visiting them will not only give you a clear picture of your credit score, but it will also help you to figure out the loan amount that you are pre-approved for. This can further help in planning your finances, and deciding a budget for the home that you intend to buy.
- You Have Enough Savings
It is imperative that you have enough savings to incur the costs of buying a home. This includes the down payment amount, the closing expenses, taxes, and any unforeseen costs that can arise.
The down payment can be as low as 3.5% of the total home value to as high as 20%. A lender will be able to assist you with this based on your financial condition and the future income that you see yourself generating. If you have enough savings to make the down payment and all the costs associated with buying a home, then you are one more step closer to fulfilling your dream of buying your first home.
- You Know What You Are Looking For
Most important of all, you have done research on the kind of home that you intend to buy. You know your financial circumstance, and you have a clear idea of what kind of home would be perfect for you.
One of the best ways to do this is by getting in touch with a real estate agent. By sharing your requirements with them, they will present a variety of house options that check off all of the requirements you have. Then, you can proceed further with the decision to buy your first home.
What Other Signs Do You Have?
The list is not exclusive, however the list of signs that we have laid out here can help anyone figure out whether it is the right time to buy a home or not.
If you think you have all the signs mentioned above, then it’s likely that the time is right to buy your first home. Just a piece of advice, do consider these silly mistakes to avoid when buying your first home.
Remember, just because you think YOU CAN buy a home doesn’t mean that you should buy one. It is a big decision and requires clarity and a lot of thought.
To make sure that you end up making the right decision when buying a property, we recommend you get in touch with an NRP (Negotiator Recognized Partner). NRPs will help you with buying your home by negotiating on your behalf and by relentlessly being on your side to find you the best deal.
So, what are you waiting for? Go ahead with the planning and searching process and take the first step towards fulfilling your dream of buying a home!