The Top 5 Signs You’re Ready to Stop Renting and Buy Your First Home

Key Takeaways:

  • Buying your first home is a big step, but it’s easy to know when you’re ready
  • Evaluate your entire financial picture, including how much rent is costing you
  • You can count on us: we’re here to help you transition into homeownership! 

To Buy, Or Not to Buy? Here’s the Answer

Timing, as they say, is everything. So how can you know when the time is right to stop renewing the lease on your apartment once and for all? Our real estate experts have compiled some of the telltale signs that it’s a smart move to settle into your own home. If you find yourself nodding along to the items on this list—congratulations! You’re ready to become a homeowner.  

#1: Your rent keeps getting more expensive

While renting an apartment can be a smarter financial decision, if year after year, your monthly payment keeps increasing, it’s time to consider locking in that price with a mortgage. Right now, rental prices are increasing in nearly every market across the country, with some metro areas seeing faster acceleration.

According to Freddie Mac, the median increase is 3.6% in 2022, but some of the most popular cities people are flocking to will see more than 7% increases. The good news is that found that first-time homebuying is now more affordable than renting in about half of the nation’s largest markets. It may be a great time to consider a move to get that first home.

#2: You’re in a long-term relationship with your job

Happy person at work with a tablet.

One of the biggest factors in securing a mortgage—and with a lower interest rate—is your employment. If you’ve worked in your current position for more than two years, or if you have several years of documented freelancing or self-employment income, it’s a great time to start shopping for a mortgage. 

Plus, with the vast majority of companies committed to dolling out anywhere from 2 to 5% raises in 2022 across all positions, there’s a good chance your steady employment will become more lucrative than it has in years. 

#3: Your nest egg is ready to hatch

Person saving money and doing financial calculations.

If your savings account has grown from a piggy bank to a high-yield jackpot, using some of that resource to invest in a home makes a ton of financial sense. The return in terms of equity from the property value increases over time will often yield much bigger returns than what your money earns in that savings account each year. 

The good news is that you don’t have to let go of all of it to buy a home. While conventional wisdom says, “You must have 20%!,” that’s not an actual requirement (it’s to avoid paying the required mortgage insurance for less than 20% down). First-time homebuyers only put down 6% on average, and there are programs like FHA loans that ask for as little as 3.5%.

#4: You brag about your credit score 

Print out of excellent credit score.

You’ve done the hard work of monitoring and improving your credit score. It’s a process that takes years and is a huge accomplishment! The better your credit score, the lower your monthly mortgage payments. (If you have less-than-perfect credit, though, there are options available, and lenders are willing to work with you to help get you into a home.)

Part of that great credit score is your debt-to-income ratio. It’s okay to have some debt—most people have a car loan, student loans, or other obligations, and they’re able to secure a great rate on a mortgage for their dream home. The key is the total debt as a percentage of your total income and making sure that it’s less than 36%. 

#5: You’re looking to seriously settle down

Person doing yardwork raking leaves.

Absolutely in love with the idea of a long-term commitment at this point in your life? Dreaming about doing yard work, weekend DIY projects in the garage, and cleaning gutters? Then it’s time to say “I do” to buying your first home. 

Owning a home is a big lifestyle change, and it comes with more responsibilities and routine maintenance costs. To make the most of your investment, experts recommend staying in your new home for at least five years. But, since your job is going great, you have plenty of savings for emergency repairs, and your credit score will save you a ton on interest over the life of your loan, it’s safe to say there’s no reason to have cold feet about becoming a homeowner.

Meet Your Home Buying Team

Our team has helped so many renters make the jump into their very own homes. There’s nothing more exciting for us than getting a new homeowner a great deal. From making an offer to negotiations and closing, our goal is to make your experience as simple as leasing an apartment. So go ahead and search homes for sale, and contact us to get started! 

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