Should You Buy a Home as Early as Possible?

I wouldn’t recommend purchasing a home as early as possible if you are not financially stable enough to do so. But when you do have that stability, and some money saved, then you should definitely look to purchase as soon as you can. Below we’ll give you the steps to buying a house so that you can compare your situation and see if now is the time for you to dive in.

All About Income

If you have established that you are ready to purchase a home, you need to review your finances. Calculate how much money your monthly income is for both yourself and your partner (if you have one). Maybe you come out to about 8k a month. This is a great starting point to see if you can afford to own a home and how much home can you afford.

You’ll want to review your debt to income ratio as well. This compares your monthly pay to your monthly costs on other loans. You may have a business loan, a car loan, or a student loan. Depending on what loan you are applying for, your lender may calculate other ratios as well. 

You’ll also need to have a pretty decent credit score and credit payment history before you’re able to apply for a loan. The most important factors when it comes to credit are making payments on time, utilizing no more than 30% of your available credit, and the length of your credit history.

Mortgage Types

There are different types of mortgages based on the different circumstances of the lender. You can get a conventional loan that is not backed by government funding. An FHA loan is less risky for lenders as they are insured by the government. Additionally, there are VA loans and USDA loans as well. 

VA loans are available to members of the military and their eligible spouses. USDA loans are also government-funded but are only available to those looking to live in acceptable rural areas. You should check to see if you are preapproved for lending. You can accomplish this through many real estate websites.

Along with the preapproval, you should browse local real estate agents. Agents are there to make this process for you as smooth and simple as possible. They are a great asset to have when you are house hunting. There are going to be dozens of contractors that you will need to source as well and your agent most likely knows plenty of people that can help.

Find Your Home

Once all of the above has been established, you are free to begin house hunting! You have a pre approval amount so you know what you can afford. You should think about what you are looking for in a home that fits your needs. If you need to have more than 1 bathroom because you have multiple children, then make sure you get more than 1 bathroom.

This is where your agent will really come to bat for you. They know about your local housing market, how it fluctuates, what homes are selling for, and the new listings with all of their amenities. At times, you may think you have found the home of your dreams only to find that the deal falls through and goes to another buyer.

During this unexpected duration, an agent can help your mental clarity so you can navigate all of the processes. Once you have really narrowed it down, it’s time to make an offer on your first pick. And one that is established, bring in all the experts to do an inspection and make sure everything is legitimate. 

Ultimately, this whole journey can be complicated and strenuous. However, the battle is worth the reward once you can kick your feet up in your new home. Armed with these expectations, you now know what can be expected when purchasing a new home.