Signs you are ready to become a homeowner

By Carrie Colby

There is no denying the flexibility that renting offers—you can move relatively easily when you want, and you do not have to carry a mortgage for decades to have a place to live. However, if you are like many renters, you are probably at least considering the idea of owning a home.

But how do you know if you are ready for homeownership? Here are some reasons why you might be

prepared to become a homeowner. If some or all of these resonate with you, it’s probably time to talk to a real estate agent you trust to start looking for a place you can be happy owning and living in. The opportunity to become a homeowner can be both emotionally and financially rewarding when you have a long-term horizon.

The following are some of the most common reasons why renters decide now is the time to own a home:

Your rent keeps increasing.

The increase in rental prices can be frustrating for numerous reasons. You cannot anticipate what your housing costs will be over the long-term, which makes it hard to plan your finances. When rent is going up, and mortgage rates are low, it can be a good sign that you should start shopping for a home. If you think about it – when you are renting, you’re probably helping to pay someone’s mortgage. Unfortunately, that person isn’t you!

Interest rates are incredibly attractive.

One of the better reasons to go from renting to owning a home is when money is unbelievably cheap.
When interest rates on mortgages are desirable, it’s like a flashing sign that says, “buy buy buy.” Interests rates won’t stay at record lows forever. History shows us that they can turn rather quickly.

You think it’s time to put down roots in a specific place.

Purchasing a home requires paying a lot of costs at the beginning that cannot really be recouped in the first few years of ownership. In other words, for a home purchase to make financial sense, you need to be ready to stick around for a while. Over time, the investment can prove quite positive, but it does take time.

Real estate has been shown over and over again to be an excellent long-term investment. Like other
investments, it is not for someone who might need to move quickly because of a job relocation.

You are sick of pouring money into someone else’s mortgage.

As a renter, your rent payments are paying the mortgage of the landlord or property owner. If you are ready to put all that money towards your future, buying a home makes sense. Each mortgage payment you make will increase the equity in your home, which is an investment for you. Generally, you can expect that over the life of your mortgage, you will gain a lot of financial benefits out of putting money into property. There are also tax advantages of owning a home as well.

You are ready to pay a down payment and closing costs.

One of the most significant signs you are ready to move from renting to owning a home is having a down payment. Financial stability is a significant indicator that you are prepared to buy a home—particularly when it comes to down payments and closing costs. Don’t worry if you don’t have 20% down—many loans do not require so much for a down payment.

You have improved your credit score.

The credit score you bring to lenders is going to play a significant role in the type of financing you can get. If you have improved your credit score, it may be time to talk to a lender about what you can do to get a mortgage.

If you need to improve your credit score, get a free copy of your credit report, and address any issues that might be hurting your credit score. Mortgage professionals and real estate agents continuously
preach about the importance of the best credit scores – this is why!

Final thoughts.

Going from a renter to a homeowner is not something that should be made as a snap judgment. There should be a lot of planning involved in buying a house for the first time. Those who are unprepared typically make buying mistakes they regret later. Don’t be one of them!

Carrie Colby is a Broker with Allied Real Estate, 909 Roosevelt Trail in Windham. She can be reached at 207-232-5497