There can be a lot of pressure to buy a home, especially in your mid-twenties. You might be feeling the pressure to purchase your home coming from your family, your peers, or even society telling you that you should be a homeowner by now. Don’t rush though, the best time to buy a home is when you’re actually ready. At Gavish Real Estate, we’ve sold plenty of homeowners their first home and we always recommend that they follow these suggestions. Here are 5 signs that you’re ready to buy a house!
Having a good credit score is important for getting a loan for your home. Generally, most lenders will require you to have a credit score above 660. If you have maxed-out credit cards and a lot of debt, the chances aren’t great that you will get a loan at a good interest rate. Before you decide to take on a mortgage, you should focus on paying down your credit cards and fixing your credit score.
One of the signs that you’re ready to buy a house is having stability when it comes to your job. Most lenders will expect that you have the same job or career for 2 years or longer to make sure that you will be able to make your regular mortgage payments.
The most important of the signs you’re ready to buy a house is that you have your debt under control. Between student loans, car payments, credit card debt, and medical bills, you can be up to your ears in debt. In fact, most people are just one medical emergency away from turning their living situation on its head. To make sure that you have enough room to breathe between your debts and your income, you’ll want to make sure that your debt to income ratio is below 36% of your total income.
This will make lenders feel more comfortable with giving you a reasonable loan that you can easily keep up even in times where money becomes tighter around the house.
Because of this, it’s important to make sure that you aren’t planning on taking on more debt anytime soon.
Saving money is a vital part of purchasing a home. There are a few reasons that you will need to have saved up in the event of purchasing a home. First, you will want to have 20% of the value of your new home saved up to use as a down payment. Having a bigger down payment can make it easier to secure a loan as well as allowing you to not have to take out Private Mortgage Insurance.
Additionally, you will want to have money saved up in a rainy day fund. You should have enough saved up to cover the cost of a leaky pipe, a broken appliance, or any emergency that should arise.
Finally, you’ll know that you’re ready to buy a house when you’re ready to stay in a city for more than a few years. If your life is still up in the air and you are planning on moving in the next few years, you shouldn’t buy a home. In some cases, some loans and tax credits that you receive may be non-repayable if you stay in the home for a certain amount of time.