Because homeownership is considered such a major part of most finances, many people rush into it without considering whether or not they are ready. Homeownership is a big commitment of money, time, and energy.
It’s important to make sure that you are truly ready to buy a home before you sign all the paperwork. Don’t just jump into the decision; ask yourself whether or not you are truly ready. Here are 5 indications that you might be ready to buy a house:
1. You Have a Stable Income
First of all, you need to have a stable income. You need to know that money is coming in each month, regularly, so you can make payments. Even if you are self-employed, you can show a stable income. But, no matter where you get the income, it needs to be stable long-term. You need to be able to comfortably make mortgage payments, and afford the maintenance and repair costs that come with homeownership.
2. You Expect to Stay Put
Unless you plan to buy a home and use it as a rental property for income, or you have a plan for flipping the home, you need to know that you are going to stay put for a few years. This means that you need to have a stable job, and that you aren’t going to move anytime soon. There’s nothing worse than trying to sell a home quickly two years after you bought it. You need time to build equity, and let the home appreciate in value (or, in the recent case, let the market recover).
3. You Plan to Put Down Roots
Are you planning to be a part of your community? Will your kids attend local schools? Do you plan to be involved with the neighbors? When you are stable enough to contribute to a community, and you are willing to make the community a better place, that’s a good indication that you’re ready to buy.
4. You Have the Time for Upkeep on the House
Many new homeowners are surprised at the time involved in maintenance and repairs. If you are going to own a home responsibly, you need to be prepared to take care of it. Do you have the time to devote to yardwork? Can you make sure that the home stays in good condition? From flooring to roofing to plumbing, at some point you will need to make repairs and replacements. If you don’t have the time to do it yourself, you at least need the money to pay someone else to do it. Taking care of what you own is an important part of any type of ownership, and it’s especially important with something as valuable as a home.
5. It Makes Financial Sense for Your Lifestyle
Don’t forget to consider your individual finances and your lifestyle. Do you have money saved up for a down payment because it’s been a long-term lifestyle goal for you? Is your family on board with the situation? You need to discuss this with your spouse and your kids to make sure that owning makes sense for you.
In some cases, owning a home might not be the right financial move right now. If you have poor credit and can’t get a good interest rate, or if you haven’t saved up a good down payment, it might not make sense to buy a house. It might make more sense to get your ducks in a row first.
Just because you aren’t ready right now doesn’t mean that you’ll never be ready. Be realistic about your finances and lifestyle. Don’t just buy because “now’s a good time” or “someone your age should have a home.” If you really want a home, and it makes sense for you financially, then you know you’re ready.
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