Owning a home is a big responsibility, but also an exciting endeavor that first-time home buyers are eager to work towards. However, although an exciting and new experience, buying your first home is something you need to be ready for. Take into account certain factors as you contemplate the idea.
Here are 8 signs you are ready to buy your first home:
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1. You’re financially stable.
- It’s not enough to be able to afford the actual property. You also need to have the money to pay the mortgage for years to come and keep up with your other monthly bills. The last thing you want is to be house poor. If you have a steady job and money saved for a rainy day, buying a home may be the right next step for you.
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2. You’re going to stick around.
- Someone who doesn’t stay in one place too long shouldn’t buy a home. It just doesn’t make any sense. Renting would be a more viable option if you frequently move. But if you’re planning to stay in the area where you are now, putting down roots would be a good financial decision.
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3. You have good credit.
- One of the documents a mortgage loan originator is going to request when you're getting pre-approved for a mortgage is your credit report. Though the qualifications vary slightly from lender to lender, you always need to have an acceptable credit score. If this is something you need to improve, your best solution is to catch up on any late or missed payments.
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4. You’re up to date on any debt you have.
- This is directly related to your credit score. If you don’t pay your bills on time or at all, your debt will rise and your credit score will plummet. If you are not able to keep up with the payments you already have, then buying your first home might not be in your best interest now.
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5. You understand the responsibility.
- Owning a home is very different from living with your parents or renting an apartment. You have a lot of weight on your shoulders. But not every first-time home buyer realizes the immense amount of work involved with the daily responsibilities of owning a home. Instead of calling your landlord when the heat goes out or when the oven needs to be replaced, you have to handle the problem on your own.
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6. You have a reasonable budget.
- Once you get pre-approved for a mortgage, you should have a better understanding of what your actual budget will be. But you may discover that your budget won’t stretch as far as you thought it would. If so, you should postpone your purchase or look in other neighborhoods for a more reasonably priced house that will let you stay within your budget after you pay the mortgage.
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7. You’re willing to consider a fixer-upper.
- If you still want to live in a certain area even though your budget won't have a lot left over to cover the cost, then you should consider buying a fixer-upper. This doesn’t mean you have to actually buy one, but it does show that you’re ready to start looking for your first home that fits well within your means.
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8. You’re aware of different mortgage options.
- A mortgage loan originator should break down all your loan options once you meet. But it’s important you know what each option entails and which ones you may qualify for. This way, you’ll already have some questions in mind when it comes time to contact a lender.