Is this the question that’s keeping you from taking the first step towards building a new home? Well, don’t delay any longer. There may never be a “perfect” time to buy a home, but if you can answer the questions below with a confident “Yes!” this could be the right time to build a new home of your dreams.
Is My Debt Under Control?
A mortgage will most likely be the largest payment you make each month and will use up the biggest portion of your income. But, you’ve worked hard to pay down your personal debt. You’ve minimized your credit card balances and have been making faithful payment on your student loans or auto loans. If this is true, you’re in a good place, financially, to take on a mortgage.
When you’re taking the first steps to buying a new home, start by checking your credit score. You can do this once a year at no cost! If you have a good, great, or excellent credit score (670 and above), you’ll be in the enviable position of having access to more mortgage options, with better interest rates and repayment plans, as well as lower fees.
But, even if your credit score is lower than you expected, you don’t have to give up hope of building a new home. Our preferred lenders can review your credit report, find areas for improvement, and put together a plan for credit repair.
Have I Saved a Down Payment?
You stuck to your budget and saved your extra cash to build a down payment for a new home, and that’s a good indicator that now may be the right time to build a new house. Having a down payment for your new house makes good financial sense because it allows you to borrow less money and pay less interest over the life of your mortgage.
In the past, a 20% down payment was considered the standard. But, there are many mortgage options available that won’t require such a large down payment. FHA loans, VA loans, and USDA loans are all available to borrowers who have a smaller down payment. If you have a good credit score and meet other qualifications, you can purchase a new home with a down payment as low as 3% or, in some cases, no down payment at all.
Am I Committed to Staying in One Place?
If you have plans to stay in a new home for at least five years, this is one more sign that it’s the right time to build a new home. It’s recommended that you stay in a new home at least five years to make home buying a solid financial investment. In most cases, it takes at least five years to begin making a dent in the principal portion of your mortgage. Whether you’re building your first home or upgrading to your forever home, choose a home that will be comfortable for your family and will suit your needs for at least five years.