Did you realize that over 5 million homes are sold in the United States annually? If you are like most people, the decision to buy a home is not something you take lightly. While buying a home for the first time can seem a bit intimidating, it is one of the best investments you can make.
The key to successfully buying a great home is finding a reputable and experienced real estate agent to work with. These professionals will be able to guide you through every step of the home buying process.
The following are some of the signs you will notice when it is time to buy a home.
1. You Have Money For a Down Payment
Before you start the house hunting process, work on saving a down payment. If you want to avoid the cost of private mortgage insurance on a conventional mortgage, then having a 20 percent down payment is a good idea. However, the amount you have to put down on a new home will depend heavily on the type of mortgage you get.
For instance, an FHA loan only requires a 3.5 percent down payment. Speaking with an experienced lender can help you iron out the details of how much you need to put down on a new home.
2. Good Credit is a Must
When going in to apply for a mortgage loan, you will need to check your credit score ahead of time. Most lenders want clients to have a credit score of at least 580 before they even look at their loan application. Working on your credit and getting your score to around 640 will increase your chances of getting approved substantially.
You will also need to keep track of your debt-to-income ratio in the months before applying for a mortgage. If this ratio is too high, it may be difficult for you to get approved for a low-interest mortgage loan.
3. Consistent Employment is Crucial
Another sign you are ready to apply for a home loan is a consistent work history. Ideally, lenders want a loan applicant to be with their employer for two years or more before applying. By having a consistent work history with one company, it will be easy to look reliable in the eyes of a potential lender.
Using one of the many online mortgage calculators can help you figure out what your monthly payment will be for a particular home. With this information, you can crunch some numbers to see if a particular home is in your budget.
4. You Are Tired of Renting a Home or Apartment
For most people, renting a home or apartment is something they do out of necessity. Over the years, people who rent will grow to want a place of their own. Buying a home allows you the freedom to alter your surroundings without seeking out the permission of a landlord.
Getting Professional Help
Are you ready to buy a home? If so, finding a real estate agent who is familiar with your area is crucial.