7 Signs That You’re Ready to Buy a Home
Buying a home is most likely the biggest purchase you’ll ever make, and it is certainly one of the biggest responsibilities you can take on. Most people grow up with the dream of owning a home someday. Although you know you want to own a home, you may be unsure if you are ready for homeownership.
Here are 7 signs that you are ready to own a home:
You Have Control Over Your Budget
The first step in becoming a homeowner is having control over your finances. Having a good budget and sticking to it is the first step in handling your finances. You should understand how much your income is and what bills you need to pay with it. Take a close look at your finances to determine whether or not you can afford the additional costs of homeownership. Think of the extra costs of owning a home such as home maintenance, higher utility bills, property taxes and homeowner’s insurance. Make sure you have enough room in your budget to cover these costs while still leaving room to enjoy life and save money.
You Have a Reliable Source of Income
For most people, buying a home means taking out a mortgage ranging from 15-30 years. A mortgage is a long term commitment over a period of time where your life will experience many changes. Having a reliable source of income is important as a homeowner. This can ensure that you will be able to make your mortgage payment without worrying about it.
It is also wise to think about any major life changes that may happen while having your mortgage and how you will handle them financially. Think about student loans that are entering into repayment, or having a child and needing to afford living on one income or paying for childcare. It is impossible to foresee every financial need before getting a mortgage, but try to plan for the moments you can predict.
You’ve Saved for a Downpayment and Closing Costs
A big factor of whether or not you are ready to buy a house is if you’d saved money for a downpayment and closing costs. There are several loan programs that require little to no downpayment and it is possible to have closing costs paid by the seller. However, saving money for a downpayment and closing costs will open up several opportunities to you. You won’t want to miss out on buying the home you really want because you couldn’t get approved for a loan without a downpayment or because the seller wouldn’t agree to paying closing costs.
You Have a Savings Account in Place
Being a homeowner comes with many responsibilities such as your mortgage, home maintenance and all of the other financial needs in life. When your plumbing is not working properly you can no longer call your landlord to have someone come out and fix it. You will be obligated to keep up on home maintenance and replace major appliances. Having a savings account will help when these unexpected events come up. Having money saved is also integral for life events that have nothing to do with homeownership. Having a solid savings account will allow homeowners to feel more comfortable no matter what the circumstances.
You’ve Built a Strong Credit History
Your credit history is a major factor on a mortgage application. Lenders will analyze your credit report to judge your history of paying back loans. They look at a variety of factors including the different types of credit you’ve had and the amount of credit available. The biggest factor lenders will look at is the timeliness of your payments. The best thing you can do to build a strong credit history is to always pay your bills on time. Having a strong credit history is a heavily weighted part of your mortgage application and it should be in good standing when applying for a mortgage.
You are Ready for a Commitment
Buying a home is a large investment both with time and money.Purchasing a home takes a large amount of time and selling a home can take even longer. Before buying a house you need to be ready to make a large commitment. The commitment to buy a home includes paying a mortgage, settling down in one area and planning on keeping the home for at least a few years. You need to do your research and be sure this is a purchase and commitment you want to make so you can avoid buyer’s remorse.
You are Ready to Make Your Home Your Own
Being financially prepared is a big part of being ready to buy a home, but owning a home is also an emotional process. The last way to determine if you’re ready to buy a home is whether or not you want to make something your own. Do you want to experience the exciting parts of homeownership such as decorating your home the way you want to. Making changes to your home without getting permission from the owner first. Are you ready to experience the pride of owning your own home and coming home at the end of a long day knowing that you are putting your money toward something that is your own?
