6 Signs That You Are Ready to Buy a New Home

Posted on November 2, 2009
Filed Under Home Buying | Leave a Comment

Knowing when you are ready to buy and own a home is half the battle.

Whether you are planning to upgrade from a rental to your own home or if you plan on moving to a bigger home, the task is daunting.

However, you should be aware that you are never the only person looking to buy. There are plenty of people and resources available to help you.

Buying a home should be based on need and financial preparedness. There are six clear indications that can help tell you it is time.

Have you have been lately keeping an eye on the real estate section in your newspaper or inquiring about the prices of houses in your neighborhood? Do you know the factors affecting the price of a house and can figure a realistic price for a house? If your answer is yes, then its time!
If you have kept aside a realistic sum to make down payment for a house, then you are certainly ready to buy a house. Down payments are certain percentage of the house price that you need to pay upfront. It can range from 3 to 20%. The remaining balance can be funded by banks.

You have a very good idea about your borrowing capacity. House loan depends upon total gross income and your monthly mortgage payment should be lower than a fixed percentage of your monthly gross. This fixed percentage is decided by lenders. Also your income, debt and credit history combined should not be in excess of 30-40% of your gross income.
You have extra money to take care of additional costs incurred while buying a house. These costs could be for insurance, real estate service charges, house furnishings, roofing, plumbing and maintenance.
You have been lately maintaining a good credit history. When applying for a loan, the banks check your credit report. They check on your number of loan accounts held by you, open and closed debts, your payment history, any irregularity, etc. You should check your report from any of the three reporting agencies, namely – Equifax, Experian, and Trans Union. Your report should look good and portray your image as a healthy and prospective borrower.
You haven’t incurred a huge expense lately or haven’t lent any big amount, especially for buying a car, vacation or for buying other property. The lenders check these and they may sanction a lower amount that you desire for.

It is time!

If you see clearly the above six signs, then consider yourself ready for the next step. You are now ready to buy a home that you have long desired.

Get in on the hottest foreclosure market ever and you might be able to get a bank owned home for but a fraction of the cost of a new home.