5 Signs You’re Ready To Stop Renting And Finally Buy Your First Home
No one can deny that it is an extensive choice for many people. Some argue that renting is equivalent to flushing money down the toilet and that you are just paying off someone else’s mortgage. Others say that they should never give up their freedom and be confined to one place.
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How do you know it’s time to take the plunge into homeownership this year if you’ve been dreaming about it for a while? Choosing to rent or purchase a home is an extensive and expensive choice, but you can still defend it with reasoning and sentiment. To assist you, we’ve compiled a list of 5indicators that you’re able to move from renter to homeowner.
1) You’ve Got A Stable Job
Since lenders and mortgage companies consider your work background before accepting you for a loan, it plays a significant role in the mortgage application process. If you work as a freelancer, you’ll need to show that you’ve had a consistent source of income for a few years with W-2s, tax reports, and other records. Know that a steady career means a stable return for lenders, which reduces the vulnerability of a borrower.
2) You’ve Set Aside Money For A Down Payment, Closing Costs, And Other Expenses That Come With Home Ownership
According to the 2019 NAR Profile of Home Buyers and Sellers, saving for a down payment is the most daunting phase in the home buying process for many home buyers. Student loans and credit card debts make it much more difficult for them to save money for a down payment for their dream home. So, if you’ve had a steady career for a while and your salary has increased, you’ll have a decent chance of saving enough money to pay for the additional costs of homeownership.
3) You’re Taking Care Of Your Loans
When applying for a mortgage, you don’t have to be entirely debt-free. Loan providers just want to be sure you don’t have too much leverage concerning your income and ensure you’ll be able to handle extra responsibilities, such as a possible annual mortgage payment. Lenders favor a DTI ratio of less than 36 percent, but borrowers with a DTI ratio of no more than 43 percent will still qualify for a home loan. You’ll be in a better shape to get the debt down to a more sustainable amount.
If you’re already renting, change your spending habits and pattern and make the necessary changes to increase your chances of buying your first home.
Home Builders Long Island will find the homes of your requirements. We have all kinds of houses in all ranges. Contact us for more details.
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4) Your Credit Score Is In Good Shape
The fact that tenants have a poor credit score is one of the main reasons they cannot purchase a home. Substantial credit is essential because it determines the amount of money you can borrow and the amount of interest you’ll pay. A decent FICO score usually is about 690 or higher, but depending on the loan program, borrowers with a credit score as low as 500 may be able to apply for a mortgage.
5) You’re happy to Make A Home In A Place You Adore
This is a personal choice, but your favorite position and desire to settle in one spot are both critical factors to remember before purchasing your first house. Whether you want to move in a few years, realize you’ll only be in a single location for a year or two, or really can’t picture being locked down in one spot, renting. Renting is also a better option if you choose to explore various places before committing to a purchase.
However, if you’re ready to settle down in a city you enjoy, have a stable career, and can see yourself establishing roots in the next five years, buying a home is the next logical step.
As Home Builders Long Island is one of the best home builders in NY, we will help you find some of the best neighborhoods that will fit your needs. You can visit our page or contact us for more information.
Owning a house is a significant lifestyle adjustment, and you must ensure that you are prepared for everything that comes with it before taking the plunge. These are some of the points that you need to go through before buying a house.