Since the economy is finally bouncing
back to a stable position, you might be thinking of taking a loan and purchasing a house. Apart from paying attention to external factors
such as competitive pricing and low-interest rates, you must consider if it is
at all the right time for you.
The following write-up specifies six
signs an individual is prepared to take ownership of a property through any
given available mode of lending, be it home loan, person lending or
any mortgage lending. Please check it out right now.
1. No Debt
You managed to get rid of the car
payment and massive credit card debt. You do not have those additional bills that
decrease the funds you set aside to pay for the mortgage. The cash flow that is
not used to pay off debts allows you to cover the various expenses related to
being a property owner, such as insurance, tax, maintenance, repairs, and
furnishings.
2. High Credit Score
As you paid off all your debts and
diligently monitored your credit report, you have been able to escalate your
credit score and enjoy a desirable interest rate. The better interest rate, in
turn, reduced the monthly mortgage payment to a great extent. Therefore, you
got the opportunity of becoming a homeowner.
3. Excellent Savings
and an Emergency Fund
Life is unpredictable, so creating a
savings account and emergency fund makes sense. You do not wish to depend on
your monthly income to handle the unexpected costs, right? Your monthly income
is already dedicated to mortgage and other bills.
Sufficient savings and an emergency
fund worth almost a year’s monthly bills help you gain a strong footing. Now
you can invest in a house without any hesitation.
4. Steady Job
Almost all jobs have their fair share
of uncertainties. However, suppose you have enough experience as an
entrepreneur or have been in a particular designation for a prolonged period.
In that case, your job will be perceived as steady, thus, capable of supporting
homeownership.
5. Increase in Income
The experts providing HDFC home loan said you must never put more than 30% of your income toward a mortgage.
You can put at least 50% if you can live lean until a big raise. Are you sure
your income will increase? If yes, it can be your chance to accumulate more
funds.
You do not have to spend too much on
house payments with a high paycheck. The extra income eliminates the financial
vulnerability you have inflicted on yourself otherwise.
6. Proper Down Payment
When you have a 10% down payment
saved beyond your emergency funds and savings, you are believed to be ready to
purchase a house. If you can put down 15% or 20%, you can successfully avoid
the private mortgage insurance (PMI) requirement. The more you pay as a down
payment, the lower your monthly payment will be. You will be then set for a
fantastic financial position.
Did you answer ‘yes’ to each of the
above mentioned factors? If yes, you must implement the next step of getting
prequalified, appointing a real estate agent, and visiting properties for sale.
Be happy – your dream of homeownership is headed toward becoming a firm
reality.