Five Signs You may be Ready to Purchase your First Home

Are you ready to purchase your first home? Are you prepared for what lies ahead?

For many individuals, the idea of purchasing a home is a bit of a scary prospect. However, with the right tools and plenty of knowledge, you can move forward and become a homeowner.  The following five signs are often a clear indication that you may very well be prepared to head toward the path of homeownership:

You have paid close attention to your credit score – Given today’s economic climate and tight lending standards, it is vital that you become aware of your credit score and do all you can to maintain a high score; without it, you will either not be eligible to receive a home loan or you will not be eligible to receive the most competitive home loan rates. Do yourself a favor and order a copy of your credit report. Check for errors, inconsistencies and perhaps long-forgotten debts, and then make it a point to clear up your report.

You have considered the responsibilities of homeownership – Owning a home can be incredibly fulfilling; however, owning a home also comes with its share of responsibilities. You may want to ask yourself whether you are prepared to maintain a home, keep the home updated and take care of the exterior of the home. You will also need to consider that you will be responsible for leaking roofs, broken furnaces and old appliances that will need replaced.

You know where you will be for at least the next few years – It simply doesn’t make sense to purchase a home if you know that you will be moving in the near future. In order for a home to make smart financial sense, you have to anticipate living there for at least five years; otherwise, your investment may end up being not such a good investment after all.

You’ve saved for a down payment – Don’t expect to receive a home loan without a significant down payment, as lenders simply are not offering loan products with little or no money down. You can expect to put down at least 20 percent of the cost of the home as a down payment.

You’ve kept your debts at bay – Another very important factor to consider when applying for a home loan is your debt-to-income ratio. This ratio is essentially the amount of debt you have versus how much you bring home in income. Too much debt and not enough income will give you a large debt-to-income ratio, thereby making it harder to secure a home loan.

Tina Fountain is the broker/owner of Tina Fountain Realtors in Atlanta, Georgia. For more information and to view homes for sale in Atlanta, visit tinafountain.com.