You’ve thought about it for awhile, you’ve been saving and deliberating, and now you’re pretty sure the time has come: you’re ready to buy a home. In this instance, you feel ready to buy a home for the first time ever! This is an extraordinarily exciting time, and can definitely be a bit scary as well.
It’s often during this time of reflection and consideration that many questions pop into your head. Can I afford to get a house? What kind of house do I want? Where do I want to live? Am I responsible enough to maintain all that comes with being a homeowner?
At Faith Management & Realty Group, we’re here to help you make this decision a bit easier. Take a look at some of the signs that indicate you’re ready to buy a house, and contact our realtors in Germantown to get started!
You’re in a good place, financially.
Being financially ready for a home is one of the most important steps to being ready to buy a house—however, this doesn’t mean you need to have stacks of hundreds ready to fork over. Rather, being in a financially secure place means you’ll need to have the following things:
- A steady, solid income: Most experts agree that when you have a monthly home payment, it shouldn’t be higher than 31 percent of your monthly income. If you’re currently making about $36k per year ($3k a month), this means that the recommended maximum monthly payment would be about $1,000. This could be pretty difficult to achieve—though not impossible—which is why you should feel confident in your salary (as well as confident that it will continue). If anything, the 31 percent statistic serves as a good guide, and a definite indicator if you’re in a place to make buying a home for the first time happen.
A respectable savings account: We’ve mentioned this before, but it’s estimated that you’ll spend between 2.5 and 3 percent of your home’s value annually on upkeep and and repairs. Keep in mind, this is for routine maintenance—years where you’ll have to replace appliances or the roof are going to be far more costly.
For any major financial purchase or endeavor, it’s crucial to have some financial security to back you up. To be fully ready for buying a home, you not only need to afford the down payment and mortgage payments, but also the costs and situations that arise along the way.
- A good credit score: A good credit score is simply essential for getting a mortgage in the first place. You should aim for having a credit score that’s at least a 700. Higher than 700 is ideal, lower than 700 means you will probably have to pay a higher down payment and more expensive fees.
You’re in a good place, literally.
Buying a house means that you should be in a situation where staying put for awhile seems likely (which we’ll dive further into in a moment). If you’re living in a place you love, that’s definitely a reason to look into buying a home. After all, how nice would it be to avoid paying rent and instead invest in a property that can provide you with financial assets later on?
In addition to living in a location that’s simply your favorite, it’s great to asses the housing market for your given area. Are homes selling like hotcakes? Do houses seem to go on and off the market in a matter of minutes? Is the nearest city continuing to develop and grow rapidly? Are prices of homes increasing at a near-constant level? All of these are indicators that it might be a great time to buy a home, in an attempt to stay ahead of the current trends. Five to ten years later, your home value could exponentially increase, meaning that it might be in your best financial interests to invest in a home now, rather than wait and be faced with mind-boggling real estate prices.
You’re in a good place, existentially.
This might seem a bit too broad and abstract, but it couldn’t be more true. Real estate experts tend to agree that you should stay in your home for at least five years in order to see the best ROI—and oftentimes, this is still on the low end of the spectrum.
Think of it like this—you have the mortgage payments, the down payment, the costs of being a homeowner, and all of these things combined is expensive. Granted, you won’t pay for all of this at once when you’re buying a house, but everything adds up, and you’ll have paid for it all the same. It might not seem like you’re taking a financial loss when you’re selling your home a few years down the road, but if that income doesn’t outweigh the expenses, you’ve lost money, where you could have otherwise turned a profit.
No one can predict the future, but being in a good place overall means that things are looking a little bit steadier. You’re likely in a job that you see yourself being at for awhile, or at the very least, in an industry that shows promise. You, or perhaps you and your partner, are feeling very ready to settle in this location. Whatever the case may be, it’s a good idea to buy a house if you see yourself staying put for the next several years (if not longer).
Being a first time home buyer can be stressful, challenging, and certainly a time for much contemplation. And considering how much of a life-changing and financially-impactful decision this is, it only makes sense that you should reflect a lot about buying a house. But the perks of owning a home are substantial, and can make a huge impact on both your finances and life as a whole. The best news of all is that, in these deliberating times, you can rely on the realtors at Faith Management & Realty Group to help you find a place to call home. Contact our real estate team today in Germantown—we look forward to working with you!