Most people know they need a stable employment and a down payment to purchase a home. There are a few other factors which may help you realize you are ready. Perhaps even earlier than you thought! Here are four main things that can help you determine if you are ready for home ownership:
DOWN PAYMENT AND ONGOING COSTS
Potential homeowners tend to focus on having enough down payment only. You should also be able to manage the mortgage payments and ongoing maintenance. My Mortgage Toolbox app from Dominion Lending Centres (https://www.dlcapp.ca/app/yenchifrank-feng) has some great calculators to help and determine what you can afford. If you have enough down payment and can manage the costs, you are ready to house-hunting!
GOOD CREDIT
As most people know, credit score plays a major role in qualifying for home purchase. A good score means the credit score is 680 or higher. If your credit score is below 680, you will more likely be paying higher interest rates. That means you will have to pay higher payments or could be denied all-together. It is vital to have your credit score in order to get the best mortgage product and rate before the home buying journey. A mortgage professional can help you to get on the right track in the shortest time possible. Sometimes all you need are a few subtle changes or debt consolidation. Your credit score will improve within a couple months.
NO OTHER LARGE, UPCOMING EXPENSES
Do you plan on buying new vehicle in the next year? Are you thinking of starting a family? Are you considering going back to school? You may think you can afford to purchase a home right now, it is vital to be honest about your future plans. What does your life look like in 1 year? 5 years? or 10 years? If you know that you are not planning on incurring big expenses that you need to factor into your budget anytime soon, then it may help you decide to buy a home.
DISCIPLINED
Budgeting is one of the most important factors for purchasing a home. You have to know what you can afford – and stick with it! It is easy to be tempted by a gorgeous 6 bedroom home or a backyard pool or private community. But at what cost? Are you ok to go all-in and leave you scrambling each paycheck or derail any plans of future financial stability? It is worth rethinking. A good understanding of what you NEED in a new home versus what you WANT is important. This is a good step towards determining what you are looking for and planning a budget that suits your needs. This will ensure you can continue to live comfortably.
These are just four signs that you may be ready to purchase a home. If you are seriously considering buying or selling, talking with me. I can help to ensure you have the best experience when it comes to buying a home!