Buying a home is a significant decision for anyone, especially first-time buyers looking to find their dream residence. One of the most stressful parts of deciding on your future home is identifying when you’re ready to move and become an official homeowner.
Investing in your future and taking the next step on your path in life is an exhilarating experience, but it should only be done when the time is right. To help you determine whether you’re ready to buy your first home, we’ve compiled a list of what to look for when buying your first house. Let’s dive in!
Sign One: You Have a Stable Income
One of the most essential things to consider as a first-time home buyer is whether your income is stable enough to support this investment. Dependable income is vital to ensure that you qualify for a home mortgage, and without a steady income stream and stable employment, you might struggle to qualify.
Putting no more than 30 percent of your income into your mortgage payment is advisable. While you can pay as much as 50 percent of your monthly income on your mortgage, this is only feasible if you have a high income or recently got a significant raise. If your income is sufficient, now may be the time to start shopping around the market for your next long-term investment.
Sign Two: Your Rent is Getting Pricier
Paying your monthly rent is increasingly difficult in today’s economy, with rental prices skyrocketing nationwide. Between March 2021 and March 2022, apartment rent in seven states rose over 20 percent, and rent has continued to rise.
The more your rent rises, the more difficult it becomes to save for your future home. If you notice that your rent is steadily increasing and you’re in a stable financial situation, it might be time to make an investment that could save you high costs in the long run. Investing in a house can help you budget and save for your financial goals and is often a wiser investment than continuing to pay rent.
Sign Three: You Have Enough for a Down Payment
Your down payment contributes significantly to your likelihood of getting approved for a mortgage. Without sufficient funds for a down payment, you might not have the financial stability necessary to buy your first house. However, if you have money allocated for a down payment or can access a housing loan, it could be your chance to become a first-time home buyer.
For instance, the Federal Housing Administration offers homebuyer loans with a 3.5% down payment for low credit scores. Many lenders are available to help you cover the cost of a new home. If you aren’t interested in a loan but have at least 10 percent of a down payment saved, now is the time to invest in your future home.
Sign Four: You Have a High Credit Score
A good credit score indicates you’re ready to become a first-time home buyer. Your creditworthiness shows that you are financially stable and responsible. Home buyers with a healthy credit score are far more likely to receive reasonable terms for their home loans, making it easier to manage your mortgage payments.
Your credit score usually ranges from 350 to 850 points. If your score is on the higher end of this spectrum, you might be in a perfect position to become a first-time homeowner.
Sign Five: You’re Ready to Live Somewhere Long-Term
When considering what to look for when buying your first house, you might become fixated on the various financial factors that factor into this decision. While affordability is crucial to deciding whether to buy a house, you should also consider personal factors.
Buying a home likely entails staying there long-term, unlike paying rent and signing a lease for a specified period. If you’re hoping to find somewhere to live for some time and are in a stable financial position, you’re on the right path to becoming a homeowner.
Sign Six: You Can Cover Additional Costs
While you might have enough saved to make mortgage payments, there are additional costs to consider before deciding to buy your first home. Consider the following costs that you’ll need to prepare for if you decide to make a move and become a homeowner:
- Closing costs: These costs are paid when you close on your house and include fees for a home inspection, appraisal, title search, and credit check.
- Property taxes: Property taxes are typically paid when you close on a home, calculated from the day you close until the end of the current tax year.
- Homeowners insurance: If you’re seeking money from lenders, you will typically need a homeowners insurance policy. Your annual homeowner’s insurance premium is usually spread over 12 months and included in your mortgage payments.
Sign Seven: Buying a Home Aligns With Your Future Goals
Ultimately, buying a house needs to align with what you want from the future. If you don’t have plans to spend on big purchases soon, you’re in a healthier financial position to make a long-term investment.
Additionally, consider where you want to live in the future, what you want to do, whether you want a family and other factors that could influence where you live. If everything aligns, buying your first home is likely meant to be.
Find Your Dream Home With Homes by Breann
Navigating the real estate market as a first-time home buyer is understandably stressful, especially without proper guidance to help you figure out what works best for your needs. The team at Homes by Breann is equipped with all the resources necessary to help you avoid the common pitfalls of buying your first home to ensure that the process is seamless and stress-free.
Homes by Breann will guarantee that you make informed decisions on your housing needs to help you find where you can thrive for years. Contact us today to get started on your first home-buying journey and find a place where you love to live.
