So you think you’re ready to buy a home? Most people have dreams of owning a home, but it’s easier said than done. Others are hesitant to make such a large purchase and second-guess whether they are ready. Whether you think you’re ready or are unsure, here are some signs that might mean you should start looking for your future home.
Make On-time Payments
If you’ve got a group on making all of your payments on time each month, that’s a good sign that you could be a successful homeowner. Individuals who consistently make late payments typically do not have a firm grasp on their financial situation, and you really need to have your finances handled before jumping into homeownership.
Afford a Mortgage
There’s a good chance that if you’re thinking of homeownership that you have your eye on a few homes on the market. Use a mortgage estimator to see if you can afford a mortgage on the homes that have caught your eye. If it’s a little high, you’ll have a goal to work towards, or you can set your sights on a lower price range.
Have Money Saved for a Down Payment
On average, many mortgage lenders expect that you put at least a 20% down payment on your home. There are other types of mortgage loans that have lower minimum down payments, so explore all of your options. However, if you have enough money saved up to put a decent down payment on a home, that’s a good sign!
If you’re debt-free, congratulations! That’s one of the best situations to be in before tackling homeownership. You won’t have any other debt taking money away from saving up for a down payment or the ability to make your monthly mortgage payment.
Good Credit Score
If you have little to no debt, you probably have a credit score that will help you qualify for a low mortgage rate. Being able to qualify for a lower mortgage rate means you’ll pay less in the long run for your house. Also, having a good credit score means you might be able to put less down on your home and still get a reasonable interest rate on your mortgage.
Have an Emergency Fund
Having an emergency fund is smart to have, regardless of wanting to purchase a home or not. If you have a substantial emergency fund, you’ll be prepared for anything that might happen in your new home without worrying about other monthly bills or missing a mortgage payment.
Love Where You Live
You might live in the town you grew up in or fell in love with a new city. As long as you love where you live and see yourself staying there long-term, it’s not a bad idea to start growing some roots, and homeownership is a solid first step to settling down somewhere.
Starting a family
Getting married or having kids means you might need some extra space that an apartment won’t give you. If you can transform your rent payment into a mortgage payment, there’s a good chance that you’ll be able to get a larger home for your growing family.
Can do basic home repairs
When you buy a home, you are responsible for some of the essential home maintenance. If you can fix a leak, change a light bulb, unclog a drain, and other simple home maintenance tasks, you’re in good shape for owning a home. Of course, you can pay a professional to do all these things, but it’s more comfortable and more affordable to do it on your own.