With historically low interest rates and the idea that prices may start to creep back up, more and more renters are weighing the option of buying versus renting. I can confidently tell you that now is a very opportune time to purchase your first home!

According to my colleagues in the Top 5 in Real Estate Network®, a national network of leading real estate agents, first-time home buyers across the country have taken advantage of today’s market conditions to go from renter to homeowner. That said, the ability to move into home ownership is very dependent upon the overall health of your finances. Buying a home not only takes having the necessary cash on hand for the deposit and closing costs, but also the financial resources to convince a bank to lend you 80% or more of the purchase price in the form of a long-term mortgage.

Here are some other important points to be aware of before embarking on a home purchase:

1. Know Your Credit Score. In today’s market especially, having good credit is very important. Take the time now to pull your own credit score so you know what you are up against. Contact me for direction on where to go and who to contact for your credit score.

2. Know What You Can Afford. The best place to start is with a pre-approval. Contact a mortgage broker to identify what you can afford and what price range you should target.


3. Check Your Cash Situation. Talk to a mortgage broker about the different loan options to identify the amount of cash on hand you will need to close. Whether you are aiming to put down 20% of the home’s price for a conventional loan, or 3% or more for a loan from Fannie Mae, Freddie Mac, FHA or the Department of Veteran’s Affairs, you will also need to cover fees and closing costs, which can run up to 5% of the mortgage amount.

4. Associated Costs. Remember that homeowners, unlike renters, must pay property taxes each year – and pay for any needed repairs or upgrades. Be sure to leave yourself a little financial wiggle room in order to meet these expected – and sometimes unexpected – expenses.

If you would like more information about preparing to buy a home, please call me.