7 signs you'll be ready to buy a house in 5 years - Business Insider

Maybe you're not quite ready to buy a house yet, but that doesn't mean you won't be in just a few years.

This is especially true if you're making money moves now that could prepare you for homeownership. Like any other goal, the move toward the dream of owning a home takes time and plenty of steps you take now could pay off later on.and start building wealth five years from now? Here are seven signs you're on the right track.Even if you don't have the desired 20% down payment required for many homeowners, you will need some sort of down payment to purchase your first property.

Figure out how much you need to save to purchase a home and start saving now. Within five years, you could have all the money you need and then some.Mortgage companies will look at several factors when approving you for a home loan and this includes how much debt you have. Many lenders even set a maximumfor their customers, meaning you may not qualify for a mortgage if you have a debt-to-income ratio over, say 43% or 45%.

To get into the home you want, it's smart to start limiting the debt in your life now. Not only will this help you qualify for a mortgage, but limiting debt helps you save money on interest payments. If you do have a lot of debt, you'll want to start tackling it now if you hope to become a homeowner in five years. Start by paying off high-interest debt like credit card debt, then move onto car loans,While you can get a mortgage from the FHA with a credit score as low as 500 provided you have a 10% down payment, you'll have more mortgage options and will qualify for better rates and loan terms if you have good or excellent credit — or really any FICO score of 670 or above.

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