When to Buy a House
It’s one thing to wonder about owning a home. It’s another thing to actually decide to buy a home. How do you know that you’re ready? If you’re wondering when to buy a house, it’s important to recognize that there are both lifestyle and financial angles to consider.
The Lifestyle Angles
Are you ready to put down roots for at least five years? According to Investopedia, that’s the minimum period that you’ll want to stay put in a house to make homeownership worthwhile, so if you aren’t sure that you can stay in one place for at least that long, you probably aren’t ready to be a homeowner.
Buying and selling a home involves a variety of expenses. While you’ll often recoup these costs if you live in the home long enough, you’ll lose the chance to do so if you sell too soon so that you can relocate somewhere else. Basically, if you’re planning to move for work or school in the near future, renting might be a better plan. However, if you’re fairly certain that you’ve found a community that you want to be a part of and have the resources to purchase and care for a house, then it might be time to make the leap from renting to owning.
The Financial Picture
If you hope to become a homeowner, you’ll also need to have your financial house in shape. Credible reports that having the following building blocks in place is a good indication that you’re ready to buy a house:
- You have a solid employment history. Lenders want to know that you have stable employment with consistent income because they want to be repaid. A solid record of steady employment is reassuring.
- Your debt is under control. Your debt-to-income ratio provides lenders a mathematical measure of how likely you are to be able to afford a new loan. The lower it is, the better.
- You have a respectable amount of savings. Buying a house is expensive. There’s a down payment, closing costs, and cash reserves to think about. Having a healthy savings account suggests that you’re prepared to meet your obligations.
Why Getting Preapproved Is Your First Step
When it’s time to buy a house, many aspiring buyers assume the first step is visiting open houses or real estate agents. There’s a better strategy. As Credit Karma explains, getting preapproved* for a mortgage first offers multiple benefits:
- It lets you know how much you can borrow, which helps you finetune your house search.
- It serves as a dress rehearsal for the mortgage approval process and allows you to identify problems that might interfere with your ability to get a mortgage. This way, you have time to fix them before they wreck the purchase of your dream home.
- It lets the people involved in buying and selling homes know that you’re a serious buyer.
- It smooths your path when you’re ready to apply for your home loan because some of the work is already done.
Whether you’re a first-time buyer or an old hand at purchasing property, the team at PrimeLending KC is ready to help you find the right loan product for your needs. Contact us today to discuss your goals.
*All loans subject to credit approval and identification of an acceptable property. Conditions and restrictions may apply.