There’s a lot to think about when you purchase your first home (mortgage insurance! floorpans! interest rates! HOA fees!), and one of the most important elements is your readiness. And, even as real estate agents, we acknowledge that it’s not in everyone’s best interest to buy a home just yet. Here are three signs that you’re ready to become a homeowner:
You pay your rent on time every month (and heck, maybe you even pay it a little early!). If you’re planning on purchasing a home, you’ll want to be financially secure with a consistent cushion in your bank account. This certainly doesn’t mean you have to be Rockefeller — in fact, we bet we can find you a few great places to live for less than your current rent — but you do have to be financially responsible.
You don’t plan on moving for at least a few years. Due to closing fees and transfer tax, the costs of purchasing a home can outweigh the benefits if you don’t plan on staying put for 5 years or so. If you’re currently in a career or situation where you may need to relocate, it may be worth renting for now.
You know your credit score, and it’s above 700. Your credit score is one of the most important factors in securing a mortgage, and those with better credit are awarded lower interest rates. If you don’t know your credit score (and aren’t too afraid to check), Carl Scaramuzza of Credit Blueprint recommends Annualcreditreport.com for its accuracy and convenience.