How Do You Know You Are Ready to Buy a Home?

You aspire to own your first home in New York, but doubt holds you back. Are you as ready to buy as you think?

To help, see what indications Money offers that you should proceed with buying a home. Invest in a residential property with confidence rather than hesitation.

Long-term resident

Do you see yourself living in the area for at least the next five years? The duration of U.S. homeownership often stretches 13 years, and that time increased in the last 10 years. If you feel you may want to move out of the area or change jobs, compare the cost of renting versus buying a home to make a financially sound choice.

Long-term income

Besides staying in your current geographic location for a while, do you predict your income remaining the same or increasing over the next several years? Not only do you need a strong income to qualify for a mortgage, but a stable income also allows you to keep up with house payments.

Debt navigation

If your credit history and score reflect a financially responsible consumer, expect lenders to view you as a favorable borrower. Further, you should have a low debt-to-income ratio. Besides learning your DTI ratio for lenders, you should also understand the ratio so you know how large of a house you may afford.

Down payment

Do you have a down payment for the property you have your eyes on? These days, lenders accept borrowers with a down payment as low as 6% to 3%. That said, you must likely pay for private mortgage insurance, costing between 0.5% and 2% of the mortgage, if you put down less than 20%.

Secure the keys to your first home with peace of mind. Just because you may not feel ready to buy now does not mean you cannot get there with time and knowledge.