Are You Really Ready for Your First Home?

There’s nothing quite like the feeling of getting out on your own. And while signing the lease on your first rental house or apartment probably gave you a sense of independence, there is really nothing that compares to signing the loan and closing papers on your first home.

Feeling unsure about your financial situation? The following are three great signs you’re ready to buy your first house.

You Have Been Saving a Down Payment

If you haven’t been, you shouldn’t even be considering a home. Most lenders want you to have at least 20% of the purchase price of a home before you buy. That means you’d need $60,000 to buy a $300,000 home. That’s a lot of money. While some programs may alleviate some of that initial burden, it’s important to start off on the right foot. Loans that require no down payments, or a very small down payment, often cost you more in the long run.

You’re Secure in Your Job

While layoffs and changes can happen without warning, it’s important to have a steady job you feel secure in at the time you decide to purchase a home. The longer you’ve been with your company, the better. Banks like to see that you’ve been employed in one place for 2+ years. Again, that doesn’t mean you can’t get a loan – but it would sure make things easier.

You Live Within Your Means – and You Have a Budget

Both are important. You have a budget and you stick to it, paying your bills, utilities, retirement fund, and savings account each month. You don’t overspend and you don’t have any debt – especially credit card debt. Your debt-to-income ratio should be pretty low or a lender won’t give you a mortgage. Those pesky banks want to know you have enough money to pay all of your bills each month. And let’s be honest – it’s a smart idea to be organized with a budget.

Still not sure if you’re really ready? Contact Sam Fine to discuss the loan process and to find out what else you might need to do to make the process move a little smoother.