Am I Ready to Buy
Many people wonder when is a good time to get married or have kids. That’s a bit different to asking “am I ready to buyer a home? The fact is we all need a place to live, whether you’re are still home with mom or she’s now living with you.
The main drivers behind buying a home is need and desire. The combination of these do go hand in hand. You can have need but without the desire to purchase one you not going to get yourself ready.
How do you know when you are ready.
Here are a few basic starting points and the first is credit. You may not have a credit score but if you do we need it at least over 580, over 620 is better and an 800 score is awesome. If you don’t have a credit score most lenders can help you with alternative minimum credit lines needed; such as a 12-month rental history or 12 months of paying a utility bill on time. Depending on a loan program a good loan originator can help get you credit in order.
Do you have enough saved, how much will you need, standard questions. However, a wide range of answers could be used here. So, let’s start with a simple common approach. You need to have saved at least enough to cover your down payment of a minimum of 3.5% of the expected purchase price and closing cost. This is tough as each state is different, a good rule of thumb would be at 4 to 5 % of the purchase price.
A buyer should also have a few months reserves saved, a reserve amount is equal to your monthly payment(s). If you have all the above and are secure with you current job and confident your income will continue out for more than three years, then you may be ready to have a serious conversation with a loan originator and see if you can get pre-qualified.
Ask questions, get your facts, set your goal and we will see you at a happy closing table.