Signs You’re Ready to Become a Homeowner

A common question among our future clients is when they will be ready to buy their first home and become a homeowner. With constantly changing interest rates and home prices, keeping up can be daunting. The great news is, there are a few signs that you’re ready to buy a home, and we are always ready to help you navigate the process. If most or all of these factors describe you, contact one of our loan officers to learn more about applying for a mortgage and becoming a homeowner.

These are some of the signs that say you’re ready for homeownership

You Have Great Credit

Your credit score is one of the most important things about you when you apply for a mortgage. No matter what type of mortgage you choose, a strong credit score is going to be benefit you.

A higher credit score can qualify you for lower interest rates, saving you thousands over the life of your loan. Generally, a credit score of 620 or higher is required for most conventional loans, but a score of 740 or higher will get you the best rates.

If your credit score is in a good range and you have a history of responsible credit use, it’s a positive sign that you’re ready to buy a home. If it’s not, the great news is you can control this. Spend some time raising your score, starting with these credit score tips.

You Have Only Manageable Debt

We will look at your debt-to-income (DTI) ratio to determine your ability to take on additional debt in the form of a mortgage. Your DTI ratio is the percentage of your monthly income that goes toward paying debts.

A DTI ratio of 43% or lower is generally considered good enough to qualify, and lower is even better. If you have manageable debt levels and your DTI ratio falls within the acceptable range, this is a good sign that you are in a good position to buy a home.

You Have a Clear Understanding of Your Expenses

Buying a home adds a level of complexity and responsibility to your personal finances. While it’s a far better use of your money than renting, it also comes with new factors like being responsible for repairs and more at stake if you miss a payment.

Homeownership comes with various costs beyond the mortgage payment, including property taxes, homeowners insurance, maintenance, and utilities. Understanding and budgeting for these ongoing expenses is essential, so you should already have a good track record of managing your personal finances well. If you have a clear grasp of the total costs involved in owning a home and feel confident you can manage them, you’re likely ready to make the move.

You’re Motivated

Buying a home is a big step, and seeing it through requires the emotional readiness and motivation to make it happen. If you’re tired of renting and desire the stability and freedom that come with homeownership, it’s a sign you might be ready to buy. Homeownership, and the journey to it, can be an emotional roller coaster. It’s essential to feel emotionally prepared for the responsibilities and challenges that come with homeownership. If you’re excited about the prospect and feel ready to handle the ups and downs, it’s a good indication you’re ready to buy your first home.

You’re Ready to Find the Loan You Need

You might notice we didn’t mention that your income is coming from a traditional source or is easy to verify on a pay stub. That’s because we are set apart from other lenders in our experience with clients who are ready to buy a home but can’t present a W-2 or pay stub that shows this quickly. Instead, we offer creative solutions like bank statement loans, which allow you to qualify for a mortgage based on 12-24 months of bank statements rather than submitting tax documents.

If you are a self-employed person, a gig worker, or have an alternative source of income that makes applying for a traditional QM loan challenging, we can help. Contact us any time to learn more about all the types of mortgages we have available and how we can help you reach your goals of homeownership.