You are really the only person who can know for sure that you are ready to become a homeowner. However, there are signs that are true tells that you have outgrown renting and are ready to buy a home. Through our decades of experience as established, successful Realtors, we have collected the most reliable signs you are ready to own real estate.
First, we should talk about what becoming a homeowner really means. Buying a home can be one of the most exciting, and anxiety-filled times of your life. The best way to ensure your experience is exciting and successful is to work with an experienced Realtor who will look out for your needs throughout the entire process.
Becoming a Homeowner Means Having a Stable Renting History.
Consider how many years you have been renting. Throughout that time, have you ever missed a rent payment or been habitually late? If you have no trouble paying your rent on time, in addition to other bills like utilities, Internet, cable, etc. then you should have no trouble paying a well thought out and financially appropriate mortgage.
Homeownership & Job Security/Savings.
Especially for a potential homeowner, job security is defined as having been employed for a substantial amount of time, while having no plans to leave anytime soon. If you are employed in a position that has allowed you to pay your monthly bills, including rent, while also allowing you to create savings, this could mean you are ready to become a homeowner. It is important to keep in mind that becoming a homeowner means taking on a 15-to-30-year mortgage commitment. Before you take the leap into becoming a homeowner, be sure you are secure in your employment position.
You Can Envision Your New Home.
A clear sign you are mentally ready to own a home is that you know what kind of home you would be looking for. Understanding what you would require in a new home is a big step toward homeownership. In the end, knowing what you want from the start will certainly benefit you when it is time to start house hunting. In considering what you would want in your first home, ask yourself:
- What home features are most important to you/your family? (e.g., dishwasher, central air, washer/dryer, etc.)
- How many bedrooms, bathrooms, square footage will you need to accommodate your living situation?
- What type of neighborhood are you looking for?
- Will you need to consider school systems?
- How far away are you willing to commute to work?
These are all important questions to consider when getting ready to stop renting and become a homeowner.
Your Credit is in Good Standing to Become a Homeowner.
Having a good credit score is the best way to acquire a good mortgage rate. According to Credit.org, “[Strong credit score] ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.”
Do you know your credit score? Your credit score will ultimately impact your ability to get a mortgage loan. The Federal Housing Administration (FHA) suggests having a credit score of 580 or better to become a homeowner.
If you are ready to become a homeowner, be sure to check your credit score at least 12 months prior to making a home purchase. If you have a credit score that is not quite where’d you’d like it to be, you can work on this now so you are ready to buy a home later.