Buying your first home is a big step in your financial and personal life. If you wait until you feel completely ready to make a major move, you may never do anything! Often you realize that you were prepared for a new phase of life only after you’ve entered the next chapter.
Still, there are signs that you’re ready to be a homeowner. Consider these:
1. You feel ready but not rushed.
When you are ready to become a homeowner, you feel reasonably confident about your decision to find or build a home. However, you shouldn’t feel rushed to find the perfect house at the best price possible in a short amount of time. If you feel pressured, then you may not be ready to buy (or you may be working with someone who wants to push you into buying too soon).
While urgency is important to making a firm decision, you shouldn’t feel that you must rush into buying a particular house or any house at all. If you are ready to take your time, then you are ready to buy.
2. You enjoy being responsible for property upkeep and maintenance.
Owning a house is a huge responsibility, which you actually enjoy. As a homeowner rather than renter, you are glad not to rely on your landlord to handle repairs, replacements, maintenance, and yard work.
You realize that not every moment will bring you joy. For example, you anticipate getting frustrating searching for contractors or getting through the learning curve associated with landscaping, replacing broken windows, making HVAC repairs, and more. But you are ready to take on these challenges in order to protect the value of your home and ensure its safety.
You’re ready to own your home if you have the willingness along with the patience, time, and money to handle both day-to-day and periodic repair, renovation, and maintenance issues.
3. Your personal life is predictable.
When your personal life is settled and not chaotic, then you are more likely than not ready to purchase a home. You might be married or single; surrounded by supportive family members or a network of friends; connected to your city, suburb, or small town. No matter your status, you have established yourself personally and are now eager to build on this foundation.
Having a predictable, reliable support system and the desire to be a positive part of your community are signs that you are ready to become a homeowner.
4. Your career has stabilized.
Gone are the days of searching for the right job, freelance gig, or business to sustain yourself. You still hope to make advances in your professional life but, generally, your career has stabilized. As a result, you have a steady source of income, which is key to qualifying for a mortgage and making payments on time for the next 15-30 years.
Regular jobs are often viewed as provided the greatest stability. But any steady stream of money from sources such as self-employment, a thriving business, or dividends on your investments can help you to afford house payments.
No source of income is guaranteed forever. But, if you have worked steadily for several years and have established a career, then it’s likely you are ready to be a homeowner.
5. You can save for the future.
You are ready to take on homeownership when you have demonstrated the ability to save for the future. A first step is the discipline of spending less than you earn so you can set aside money for items such as:
- Mortgage Down Payment
- Emergency Fund
- Home Repairs and Maintenance
- Children’s Education
Being able to save money regularly is critical to getting a mortgage (or buying a home with cash) and managing other aspects of your financial life.
6. You are able to accept loss without ruining your financial life.
You need to have some financial cushioning to accept potential losses without financial devastation.
For example, if the value of your home drops dramatically within months after you make the purchase, you should be able to continue to make your house payments, even if your mortgage is underwater. If you need to sell the property to relocate for a new job, you should have the financial wherewithal to accept the loss and move on.
This financial strength can come from cash savings to cover any shortfalls, outside investments that could be liquidated, or an action plan to maintain a positive cash flow in various scenarios.
What do you think? If you can read through this checklist without squirming, then you are likely ready to become a homeowner.