Think that you are ready to buy a home? Chances are good if you have a solid financial track record that you are correct about this being the ideal time to make a purchase. But in case you are looking for a little extra guidance, following are some specific indicators that this may indeed be the moment to act.
Home Purchase in Florence, AL
- Your financial metrics are in good shape. Look at your credit score, your debt-to-income (DTI) ratio, and how much money you have socked away in savings. If your credit score is high, your DTI ratio is low, and you have at least six months of cash reserves, all those factors will work together to give you excellent bargaining power as you shop for a home.
- You are steadily employed and have room to grow professionally. Another important consideration is whether you have a stable job in a profession where you can continue to expect opportunities over the years ahead. Considering this is important not just for evaluating your risk profile as lenders will see it, but also for making sure that you really are in a position where you should be able to afford your home now and in the future.
- You can afford a full down payment or PMI. If you have enough money to make a 20% down payment, that will give you an excellent head start on paying off your mortgage. It also may mean more affordable interest rates and other benefits. But that does not mean that you need to wait until you can afford a large down payment to purchase a home. If you can afford to pay for private mortgage insurance (PMI), you may be able to make a small down payment or no down payment, depending on the type of home loan you apply for. In some cases, this can still lead to saving money if it means that you are able to purchase a valuable property now at a significantly lower price than you would if you waited to buy.
- Your home loan payments won’t strain your budget. Think about how much room you have in your monthly budget now after you pay your current expenses. Adding in your mortgage payments in the future, you should still have enough of a buffer left over that you can keep adding to your savings. If you calculate that that is indeed the case, this might be the time to move forward.
- You know how long you plan to stay in the area. If you are not yet sure whether you will be in the area for a few years or a few decades, you might want to hold off on buying a home until you are more certain of your plans. But if you feel secure about what you plan to do, that puts you in a great position to buy a home with the type of mortgage rate (fixed or adjustable) which will be most suitable to your needs.
- You are ready for all the associated costs of home buying and homeownership. Finally, figure out whether you have enough money to cover the miscellaneous fees and expenses which are associated with purchasing a home. Also think forward to the costs of homeownership which go beyond your mortgage payments (see “7 Costs of Homeownership You Haven’t Accounted For”). If you are in good shape to cover these payments, you should be financially able to feel comfortable purchasing a home.
Let American Pacific Mortgage Help You Move into a New Home in the Shoals Now
Realizing that you are ready to purchase a home is an exciting moment. Seize that moment today by contacting American Pacific Mortgage, your mortgage broker Tri-Cities experts. Please call (205) 495-0313 to schedule your consultation.