Am I Ready to be a Homeowner?

April 1, 2024

by Christian Phillips

Are you struggling to decide between renting and buying a home? These 5 signs can help you determine if you are ready for homeownership.

Rent is on the rise:

Compared to a mortgage payment, rent can be just as or more expensive. Furthermore, rent prices can fluctuate depending on your landlord's situation, making saving for other financial goals challenging. If your rent keeps increasing, it may be a sign that it's time to consider buying a home.

Building equity in your own home is a wise investment instead of paying rent to a landlord.

Homeownership expenses:
When renting a property, the landlord is responsible for any maintenance expenses, minor or major. However, if you buy a home, these expenses become your responsibility. It is recommended that you establish an emergency fund before purchasing a house. Usually, home buyers invest most, if not all, of their savings into the down payment, leaving them with limited or no funds for unexpected repairs. Therefore, planning and preparing for such expenses in advance is important.

There is stability in your life:

Buying your first home is a significant financial decision, requiring a great deal of responsibility. A stable job and consistent income are essential.

Homeownership may not be ideal if you haven't saved and budgeted for upfront costs that take a few years to regain.
Consider asking a Frandsen mortgage lender about down payment assistance programs to help reduce your financial burden.

You have manageable debt:

When an applicant applies for a mortgage, lenders assess the debt-to-income ratio to determine the applicant's risk level. Those with higher DTIs are deemed high-risk borrowers, while those with lower DTIs are considered creditworthy.

A life-changing event occurred:

The decision to become a homeowner is often prompted by major life events rather than just a rise in rent. For example, you and your partner may have recently married and are considering purchasing your first home together. Or maybe you are considering starting a family and need more living space.

It is understandable that one may want to purchase a house following a significant life event. However, it is crucial to remember that it is best to avoid any significant financial changes during this time. This includes changing jobs, applying for a new credit card, or buying a new car.
- Lenders may reject your mortgage application due to these changes.

You know what type of house you want:

When buying a home, there are many options to consider.

What type of home are you looking for? Do you want a single-family house, a duplex, a condo, a townhome, or a manufactured home?
Where would you like to live? In a suburban, inner-city, or rural area?
What features are important to you in your dream home? Do you need a garage, a big lawn, a laundry room, a walk-in pantry, good interior lighting, new appliances, tall ceilings, central heating and air, a finished basement, or a covered patio?

Finding your dream home can be more manageable if you already have a clear idea about what you want in a home. A realtor can help you find a home that meets your desired price, style, and location.
Ready to transition from renting to homeownership? Contact one of our expert mortgage lenders to start your journey today. Frandsen Locations

Am I Ready to be a Homeowner?

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