Buying a home requires a lot of thought and consideration. If you're a first-time buyer, it can be particularly challenging to determine your readiness because you've never entered the real estate market before. Fortunately, you can find out if you're ready to buy property by looking for the three signs listed below.
3 Signs You're Ready to Buy Property
1. You're Financially Stable
One of the biggest signs that you're ready to buy your first home is financial stability. This quality goes further than simply being able to afford your bills; you also need to look good on paper. Firstly, your credit score needs to be high enough to qualify for a mortgage approval. Some conventional lenders require a minimum of 620, but many prefer at least a 640. They'll also want at least a year of consistent payments on your current accounts.
On top of a good credit score, you'll need a healthy debt-to-income ratio. Thirty percent or less is typically the desirable range of debt, especially for first-time buyers. However, some home loan lenders will accept a debt-to-income ratio of up to 40 percent.
2. You've Accumulated Substantial Savings
Another indicator that you may be ready to buy property is that you've built a substantial savings account. Almost every type of mortgage requires some form of down payment that you will need to pay at the time of closing. Even if you opt for something like a USDA loan, which doesn't require any money down, you will still be responsible for closing costs. Before you begin your real estate endeavor, make sure that you have at least seven percent of your estimated price point saved for an FHA or 23 percent if you intend on using a conventional loan.
3. You're Ready to Settle Down
You should also be ready to settle down before you buy a home. A house is an investment, and it's nearly impossible to make a profit off of it in the first several years after purchase. For this reason, it's important that you're ready to settle down in that location for at least three years. If the thought of putting down permanent roots scares you, then it may be best to wait another year or two.
Buying a home is a big leap, and the team at G. Le' Roi Group Realtors is ready to help you find the right location. Based in Maryland Heights, MO, these agents are known for providing an exceptional level of service and a personalized experience. If you're ready to buy property, speak with a knowledgeable Realtor® today by calling (636) 329-4544. You can also begin your home search by browsing their online real estate listings.