Buying a home is a big deal, especially if you have only ever rented your home. Having a house to call your own is a dream for many people. But when can you be sure that you are ready for a first-time mortgage? Here are some signs that will let you know you are prepared to own a home.
5 Signs it’s Time to Buy a House
It is understandable if you don’t want to jump into buying a home, but if you are looking forward to the day when you stop paying your landlord’s mortgage and start paying your own, that time may be now. Here are some ways that you can be confident that you are ready to buy a home of your own.
1. Long term employment
If you have been working full-time for about two years, and have built up a good credit history, that will help you get reasonable rates when you apply for your first-time mortgage. But what if you are self-employed? Don’t worry: lenders are just looking to see that you have a regular, reliable income. If you are a contractor, they will ask you to supply them with your last couple of tax returns instead of T4 slips.
2. Low debt
While it is likely that you’ll have some amount of debt when you apply for your first-time mortgage, that won’t prevent you from getting approval. Lenders will want to know what your debt-to-income ratio is, which is an estimation of how much of your monthly income goes towards debt payments. So long as your debt ratio is under 36 percent, you can still qualify for a mortgage.
Buying a house requires you to have some money to put towards the purchase: this will be to cover the down payment, insurance, and some other expenses involved. Remember that the more you put towards the price of your property now, the less you’ll have to borrow and pay interest on in the coming years.
4. Ready to settle in
If you like the city you live in and can picture a future there, you could be ready to buy a home. For those who are planning on staying where they are for at least 5 years, buying a home is a good idea. However, it’s crucial to be sure you are ready to settle down as buying and selling homes takes a lot of time and energy.
5. Outgrowing your space
Are you outgrowing your rental space? Do you have kids or are expecting a baby soon? Those are some great reasons to consider getting your own house.
Tips for Your First Mortgage
Getting a mortgage can feel intimidating, but it doesn’t have to be. Here are some things you should look for in your first-time mortgage:
1. Low-interest rates
One of the critical things to watch for when you are looking for a mortgage is low-interest rates. If you notice that interest rates are low, it may be an excellent time to buy your first home.
2. Emergency fund
Owning a home can be a good investment, but be prepared for the unexpected: if you have trouble with your home, such as a leak, then you’ll have to pay for the repairs yourself.
3. Credit score
Your credit score is your key to getting the best rates and options from lenders. The higher your score, the more clout you’ll have with lenders.
If you are interested in learning more about buying your first home, call Northwood Mortgage™ at 888-492-3690 or contact us here.