The idea of buying a home is attractive. In fact, many see it as the pinnacle of the American dream. Before aspiring homeowners can purchase a home, however, it’s best to find out if they can afford it in the first place. Individuals who are interested in buying a home should keep these in mind and make a buying decision only when such signs are present.
Having no outstanding car payments or credit card debts means that you won’t have to pay extra bills that can diminish the funds you have available to pay the mortgage. The extra cash flow, which is not going towards your debt, is necessary to ensure that you can cover other homeowner-related expenses, such as repairs, homeowner’s insurance, and property taxes.
Excellent Credit History
Credit history is important when purchasing a property. Zeus Mortgage Bank, a trusted mortgage lender in Texas, says that credit history helps lenders determine whether a potential borrower has a history of repaying debts on time. An excellent credit history can make the choice of becoming a homeowner an affordable prospect because it gives you access to better interest rates. Qualifying for a better interest rate, in turn, means that you can enjoy a lower monthly mortgage payment.
While any job comes with uncertainties, holding down a steady job is a good sign that you can buy a home. Lenders will likely view you as someone financially stable enough to back up homeownership payments. This is true especially when you have had the job for many years or when you’ve been in business for quite some time.
A Solid Savings and Emergency Fund
Sometimes, life hits you with something unexpected, and it may require you to shell out more cash than you budgeted for. A solid savings and emergency fund can help you face the unexpected situations in life. Setting aside money equivalent to at least a month’s worth of bills is a great position to be in before purchasing a home.
You’ll know that you’re ready to buy a house when you don’t have debt, have a great credit history and a steady job, and a savings and emergency fund. If you are all four, the next step should be to get yourself prequalified and find a realtor who could help you find your ideal home.