Are You Ready to Buy a House?
Of all of the financial decisions, you make in your life, buying a home may just be the most important one — and for a lot of reasons. See, buying a home could mean you’re buying a pretty massive asset. The average cost of a home in the United States is close to $300,000, and the average monthly mortgage cost is close to $2,000. This is by no means a small purchase, and entering into the home buying process definitely requires a lot of thought and intentionality.
However, buying a home can be an incredibly exciting thing — and one we recommend to so many people. Our biggest concern? That you make a financial decision that makes sense for you and your finances. It’s that simple. If you’ve been wondering whether or not you should buy a house, here are some key indicators that it may be time.
4 Signs You’re Ready to Buy a House
You have minimal debt.
Most people who buy homes are securing financing, which means they’re going into debt. This isn’t necessarily a bad thing, but it can be a bad thing if you have a significant amount of financially heavy consumer debt — and it can also affect your loan approval odds. If you find yourself deep in consumer debt or high-interest debt that’s giving you an already high debt-to-income ratio, consider spending some time on a pay down strategy before home shopping. Ideally, your debt-to-income ratio needs to be around 35% or lower with the addition of a mortgage payment.
You have a secure savings.
When buying a home, you want to have a nice padding of savings to support you along the way. While, ideally, some of this savings amount will go towards a down payment, it’s also a good indicator of financial health and financial stability. Make sure you have several months of expenses left over post-down payment costs, and keep your retirement savings in mind as well. If you don’t feel comfortable with your savings amount quite yet, that’s okay! However, it may be a good idea to hold off on a home purchase until you are.
You’re comfortable with ongoing maintenance costs.
Home buying isn’t a one and done purchase — it’s one that comes with quite a few ongoing maintenance costs, some of which will likely be unexpected. This is a major differentiator between renting and home ownership, since, while you’ll have equity in the home, you’ll also be on the hook for any issues that come up. While homeowner’s insurance can be a big help on this, it’s not the end all, be all, so be prepared!
You have great credit.
Having good credit is essential to landing a mortgage rate that helps you instead of hurts you, and is also key in getting approved for a loan with good terms. There are loan programs that can support some with lower credit or problems in their financial history — which we may be able to help with — but we’d still recommend taking the time to fix and repair credit before thinking about applying for a mortgage and buying a home.
At VRM Lending LLC, we’re here to help you make the right decision for you — and to help you secure the financing you need to do it. Our experienced, friendly team of mortgage loan officers are standing by to help. Contact us here.