Buying a home is one of the biggest financial commitments most people will make in their entire lives. While the dream of homeownership can be seductive, it’s important to make sure you’re actually prepared to own if you want to avoid unnecessary complications. So, are you ready to buy?
1. Your financial situation is stable
A good indicator of whether or not you’re ready to buy your first home is that you’ve finally reached a place of financial stability. You just paid off your last credit cards, your student loans are under control, and you have reliable transportation. There are no unforeseen complications or financial hiccups in your future.
The rest your life is stable too
Just because your money situation is steady, that doesn’t mean everything else is. If you think you’re ready to buy your first home, make sure to take stock of the rest of your life. Is your work situation going well? Even if you’re drawing a decent salary, you may not want to stay where you are if you don’t feel appreciated or if you don’t like the work itself. The same goes for your relationships with any cosigners you may have. The same goes for how you feel about your current city of residence. On the other hand, if you feel good about all of your current commitments in life, then it’s a strong indication that you’re on the right track to buying a home.
3. You’ve been saving instead of splurging
While it’s true that there’s a mortgage for almost every budget, the more stable fixed-rate plans cost more money up front. The upside to this is that you’ll have less surprise fees in the long run. FHSA programs for low-income/no deposit borrowers come with extra mortgage insurance in addition to your Homeowner’s insurance and mortgage. APR’s can seem less expensive, but a shift in the market can mean major changes in your monthly payment. If you can put money down, then you’re in a much better position once it actually comes time to buy.
Renting doesn’t make fiscal sense anymore
Maybe you have a growing family, or are running out of space for your pet hobbies or a business you’ve started out of your apartment. Whatever the reason, there comes a time when the cost per square foot of renting just stops making sense. If you’ve looked around for apartments or lofts to fill your needs and found that they cost as much if not more than a comparable house, then it might be a good time for you to buy.
5. You’re willing to invest the time it takes to buy a home
Buying a home can be an incredibly time consuming process. If you’re not willing to put in the time, you’ll likely make a mistake that could seriously cost you in the long run. If you think you’re ready for a home, but you’re not willing to wade through all the ins and outs, then you’re definitely not ready to buy.
All in all, if you can say with certainty that the above applies to you, then your time to buy is now.