Becoming a homeowner is one primary way to significantly build up your financial security because as you begin to pay your mortgage, you start to build equity in your home, which becomes a valuable economic asset. As the real estate market continues to shift, the cost of homes, the price of rent, and the cost of borrowing money is becoming more and more expensive, causing many people to wonder if they are ready to take the serious step of buying a home. If you are located in the areas of Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, and have questions about the right time to buy a home, Foundation Mortgage can help. Continue reading to determine if you are ready to become a homeowner.
How Do I Know If I’m Ready To Become A Homeowner?
There are several factors to consider when making the decision to stop renting and become a homeowner. If you are currently renting a property, and your rent is consistently rising, it is more difficult to save up for buying your own property. If this increasing cost begins to feel like a bad investment, that could indicate that you’re ready for a mortgage. Having a low debt-to-income ratio, (DTI), is one factor that suggests you are ready to own a home because not only does it demonstrate that the amount of debt you owe is manageable, it increases your overall credit score and increases your chance of getting a mortgage. Also, having a higher credit score is a strong indicator that you are ready to purchase a home and leads to more favorable mortgage rates.
Affording A Down Payment
Many potential homeowners worry about coming up with sufficient funds for a down payment, which causes some people to continue renting, even when they’re interested in buying a home. Your down payment amount will ultimately depend on what type of loan you qualify for, and fortunately, there are many programs available like FHA, VA, and USDA loans that help homebuyers afford a down payment, as well as closing costs.
Becoming Prepared To Buy A Home
When you decide to buy a home, you will want to ensure that you fully understand the financial obligations that are associated with buying a home, and you will want to know what to expect when you begin applying for a mortgage. To fully understand how much you will be able to afford for your home, you will want to review your monthly income, the amount of debt you owe every month, and your current amount of assets and savings. In addition to your income and what you owe, when you buy a home, you will be required to pay mortgage costs and mortgage insurance costs each month. It is also advisable to have sufficient funds saved in the event that your home needs repairs like broken appliances, roof issues, water leaks, etc.
Get Assistance Becoming A New Homeowner
Making the decision to buy a home can be intimidating, but offers many advantages over renting. If you are interested in buying a home in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, and want to explore your financing options, contact Foundation Mortgage today for a consultation.