Some people think about buying a home when they are paying rent for the 100th time. Others decide that they are ready to buy a home when they hear their family and friends explain the joys of homeownership. If you are one of the thousands of Rhode Islanders that are now considering homeownership, J.Christopher Real Estate Group would like to share the subtle signs that you are ready for this new chapter in your life.
“The majority of Americans can certainly purchase a home if they spend their money wisely,” said Jarrod C. Lewis, owner of J. Christopher Real Estate Group. “For most home buyers, the largest hurdle to homeownership is simply having their finances in good order and understanding what lenders are generally looking for in a borrower.”
Families can gauge their home buying readiness by using the same metrics that banks use when they are deciding who to approve for a mortgage.
Tools like the debt-to-income ratio are mathematical formulas for banks to quickly assess whether someone would be able to pay a mortgage comfortably, but it wasn’t designed for everyone’s financial situation. To help you determine whether you are ready to make the jump, we have compiled a list of signs that typically indicate you are ready to buy a home.
A Healthy Savings
If you have diligently saved more than six months of rent in your bank account, you have saved enough money for a down payment on a home. Assuming you are not taking advantage of a $0 down payment program, that means you can pay between $5,000-$8,000 for a minimum down payment and still have money left over for your regular monthly expenses.
First-time home buyers will have better luck in the mortgage process if they can show a solid job history. It is important to note that mortgage lenders will consider applicants with shorter job histories if they are working in the same field.
Looking for Investment Opportunities
Families looking for investment opportunities may want to consider buying real estate because it is generally accepted that this type of investment will grow over time. An added benefit is that you can live in or rent out the property for a steady source of additional income.
Ready to Settle Down
You may have moved multiple times over the course of a few years, but you and your family have decided to stay in the same place — especially if you have kids who are ready to start school.
Good Credit Score
Financing a home is not possible without a credit score. That said, anyone with a score above 650 should be eligible for a mortgage, pending other factors, with higher scores netting first-time home buyers a better overall interest rate.
Your Financial Obligations Are Manageable
Your debt will undoubtedly appear in your credit score, so it is important to remain honest with your lender. Deals can fall through at any time, but you can be confident about your odds if you are not expecting changes in your financial situation.
Homes in Rhode Island are plentiful if you know where to look. J.Christopher Real Estate Group has the expertise and professionals to help you secure a home fast, and at a price that you can afford. If you meet some, or all, of the criteria mentioned above, give us a call at 401.830.6906 to begin scheduling tours today.