3 Signs You're Ready to Buy a Home

By Dan Main

Homeownership is a goal for many renters. A home with your name on the deed offers an undeniable sense of pride and a lasting symbol of your hard work. But how can a person know when it's time to move forward with a home purchase and stop spending money on rent? Below are a few key signs to look for.

How to Tell If You're Ready to Buy a House

1. You Have the Down Payment

Having the money for a down payment is the first step to a home purchase. The minimum amount needed is 3% and in some cases a down payment may not be required such as a VA and USDA.

First-time homebuyer and down payment assistance programs often help offset down payment costs. So, if you've been preapproved for a mortgage and have the down payment saved up, it's likely time to start house shopping.

2. You've Lowered Your Debt

home purchase One of the formulas used to determine mortgage eligibility weighs in one's debt-to-income ratio. Basically, this looks at your ability to repay existing debts and whether a mortgage is feasible given your current debt load.

While you don't need to be debt-free to buy a home, you should be employed and actively working toward repaying your outstanding balances.

3. You Have Good Credit

A good credit score is essential to obtaining a lower interest rate, which will help you save on the long-term costs of a mortgage. In general, work to get your credit up to 700 or higher.

If you haven't reached this point, don't get discouraged. There are many ways to strengthen your score, such as paying all bills on time, minimizing or eliminating debts, not closing unused accounts, and monitoring your credit report and alerting the agency if there are any errors.

If you've achieved any of these milestones, you might be in a position to buy a house. Dan Main is a mortgage lending and home loan professional with more than 20 years of experience serving the O'Fallon, MO, area. He will guide you through your home purchase and help you explore all available financing options. Call (636) 284-4144 to schedule an appointment or visit his website for more homebuyer resources.

Dan Main: NMLS # 502036

Flat Branch Mortgage Inc: Missouri NMLS #18-1713, Colorado