Resolution to buy your first home this year? How to know if you’re ready

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Financial goals always top the list of new year’s resolutions year after year, and that includes finally plunging into homeownership. Did you make a resolution to buy your first home this year?

If you did, here’s how to know if you’re really ready:

  • You have a consistent and stable income: which will make things easier when it comes time to get pre-approved or pre-qualified for a mortgage. Those of you who are self-employed, speak to your mortgage broker about specific requirements for your financial situation. Many lenders do have some programs that can help you get into homeownership.
  • You have a down-payment: if you don’t have 20% of the purchase price (or more) saved for a down-payment, speak to a mortgage broker about insured mortgage options for you. Ensure that you not only have the down -payment, but that you can really afford that down-payment. Meaning that it’s not 90% of your savings, or your money in general.
  • You have great credit: of course, your credit standing will become very important in this process. Having a great credit rating and no debt will be a sure sign you’re ready. Further, your credit score does need to be at least 650, which is the minimum score that lenders will give credit to. Of course, the better the rating, the better your purchasing power.
  • You’ve crunched the numbers: have you actually calculated what your monthly payments would be and you’ve taken into account bills, etc.? Ask a REALTOR® or mortgage broker about what percentage of your income should realistically be spent on housing. Besides closing costs and purchase price, you want to take into account things that will arise month-to-month: repairs and maintenance, emergency situations, etc. Again, a real estate professional will be able to help you determine budgets for things like that.

Feel free to contact us anytime if you have questions about home buying. Alternatively, you can always find us on Twitter too.

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