6. You Need Room For a Growing Family.
Having more room is another substantial reason for purchasing a home. If you are expecting to have a child shortly, it makes sense to start considering homeownership.
While renting is sometimes a necessity for growing families, if you are fortunate enough to be in a position where you can buy a home, doing so can offer many benefits for you and your growing family.
Your new home can give you room to expand, such as providing your family bedrooms, bathrooms, and all the other spaces that make life easier. The house can also serve as a stable location for peace of mind for you and all your loved ones.
By becoming a homeowner, you’ll be able to pick and choose the kind of property that will serve the needs of your lifestyle. Buying a home can not only be rewarding but fun as well. It is a chance to spread your wings and take another step towards becoming an adult.
7. You Are Ready to Pay a Down Payment and Closing Costs.
One of the most significant signs you are ready to move from renting to owning a home is having a down payment. Financial stability is a powerful indicator that you are prepared to buy a home—particularly when it comes to down payments and closing costs.
You want to be able to pay the down payment to get a mortgage, and you want to be able to pay the closing costs so you can finalize your purchase. And don’t worry if you don’t have 20% down—many loans do not require so much for a down payment.
There are numerous loan programs available for first-time buyers. It can be very confusing to a first-timer because of how many mortgage choices are out there. An experienced mortgage broker can come in handy to answer all of the questions you should be asking a lender. Remember, you should be interviewing them as much as they are interviewing you.
For first-time homebuyers, FHA mortgages have become really popular. Some FHA loans only require 3.5% down, while loans backed by Fannie Mae and Freddie Mac only need 3% down.
If you can come up with 3% down and qualify for the right loan—and have your closing costs in order—you can likely become a homeowner.
When buying a fixer-upper, you may also want to consider an FHA 203k loan which allows for rolling the costs of improvements into one mortgage.
8. You Have Improved Your Credit Score.
The credit score you bring to lenders will play a significant role in the type of financing you can get. The worse your credit score, the fewer options you have available when buying a home. That is why it is essential to do what you can to improve your credit score before you go to try and buy a home.
The better your credit score, the more options you will have, and the more money you can save on your mortgage.
If you have improved your credit score, it may be time to talk to a lender about what you can do to get a mortgage. You can sometimes qualify for a mortgage with a credit score of 500—but that does not mean it will be a mortgage that you want.
The mortgage will have an undesirable rate and will require a higher down payment. But, if you have a higher credit score, the loan will have a better rate and require a lower down payment.
If you need to improve your credit score, get a free copy of your credit report, and address any issues that might be hurting your credit score.
Final thoughts
Going from a renter to a homeowner is not something that should be made as a snap judgment. There should be a lot of planning involved in buying a house for the first time. Those who are unprepared typically make buying mistakes they regret later on. Don’t be one of them!