Do you think you are ready to buy a new home?  Team Couch helps hundreds of clients every year find the homes of their dreams.  Here are a few things to consider to help you get started on the road to home ownership!

How do you know if you are ready to buy a home?

• You have money saved for a down payment

You must have enough money saved up to even consider home ownership; it is a no-brainer, really. The general rule of thumb implies that you should have at least a minimum down payment of 10-20 percent of your home´s market price already set aside. However, that’s definitely not going to be enough; it’s always better to have more cash saved up. It is because there are several other factors too. For instance, you will have moving expenses, repair costs, maintenance costs, closing costs and emergency fund and so forth. Therefore, if you don’t think you have enough to cover the one-time down payment cost and other recurring expenses, it is a bad idea to buy a home.

• You must be willing to settle down for a minimum of three to five years

You must be willing to settle down and maintain the house for a minimum of three to five years before considering being a house owner. However, you can also rent it out if you intend to become a landlord. After all, if you can own a home and have it earn money for you, providing you with additional cash flow, it is even more beneficial. However, if you have intentions of making profits off your home by selling it at a greater value after a certain period, you must be ready to maintain your home for a minimum of five years.

What must you think about before buying a home?

Only opt to buy a home that you can actually afford

You must only proceed to purchase a home that you are comfortable with financially. For instance, if your plan includes using FHA financing, you must ensure that the monthly home payment doesn’t exceed 31 percent of your monthly income. However, if you are opting for a conventional loan, it is advisable for you to not acquire a home that requires you to spend more than 30 percent of your gross monthly income on home expenses.

Improve your credit score

It’s of paramount importance for you to improve your credit score before purchasing a new home. If you have a higher credit score, it will help decrease your monthly payments. If your credit score barely measures to 680, you will probably end up paying a large down payment. Any lower than 680 and you won´t even be considered for a home loan. Those with credit scores of 700 or more, end up getting the best deals. If you want to get an FHA loan approved, you must have a minimum credit score of 580. You must make sure that your credit reports are updated i.e. if you don´t want to be penalized unfairly for previous debts. Here´s a tip for you—you should stop applying for new credit at least 12 months before you apply for financing.

How much to save for down payment? And, are there other costs involved?

The general rule of thumb implies that you should have a minimum down payment of 20 percent of your home´s market price saved up. However, simply meeting your down payment target is not enough; it is always better to have more cash saved up. It is because there are several other factors to be taken into consideration too. For instance, you will have moving expenses, repair costs, maintenance costs, closing costs and emergency fund etc.

The steps you should take to purchase a home

The first step includes you starting your research. Contact a Real Estate Agent like Team Couch. You need to shortlist your homes and be well aware of the housing trends in your area. Then, you should determine your budget and shortlist houses that you are comfortable with owning financially. After that, you should proceed to get prequalified and pre-approved for credit for your mortgage. Now, your real estate agent will start showing you houses and properties in your price range. When visiting these homes, it is necessary for you to take notes, pictures, and videos. You must also check certain things such as the plumbing system, electrical system.

From there, your Realtor can help guide you the rest of the way!