How do you know when you’re ready to buy your very first home?
Today’s message is for those who are thinking about buying their very first home: How do you know if you’re ready to make this milestone purchase?
Of course, you’re the best judge of when to buy your first home, but you do need to take into account a number of things:
1. Consider how long you plan to live in the area. Generally speaking, if you stay in one place for three years or more, it’s a financially wise decision to buy a home rather than to rent. If you’re renting, you’re spending $1,000 a month for three years, so that’s $36,000 that you’ve lost. That doesn’t even factor in rental rates rising in those three years.
2. If you plan to buy a home, do so sooner than later. Let’s say you plan to buy a $250,000 home, but you wait a year to do it. That home might become a $275,000 home in that time, and you’ll also have lost $1,000 a month in rent. Since home prices have been going up steadily in the Triangle area, it’s worthwhile to consider it. Wise people will advise saving 10%, 20%, or even 25% for a down payment, which is solid advice.
However, if it takes you three years to save up $50,000, remember that you’ll also still have spent that $36,000. Plus, that $250,000 home will no longer be $250,000 three years down the road. We can introduce you to lenders who have programs that require zero down payment and no mortgage insurance for qualified buyers.
3. A good credit score is important to becoming qualified. However, if you have a substandard credit score, there are ways to increase it rather quickly. There are also some lenders who are willing to go fairly low in terms of FICO scores.
If you have questions or need any assistance, reach out to us. Let’s get started on helping you buy your very first home.