5 Signs You’re Ready to Buy a Home
Are you tired of paying increasing rental rates and watching that money go straight into your landlord’s pocket? Are you always saying ‘one day in my house I’ll have…’? Or, are you wishing you could make permanent design changes? Well, sounds like you might be in the market to buy a home.
Unfortunately, no one can tell you when you’re ready to become a homeowner. Buying a home is most likely the biggest purchase you’ll ever make. While buying your first home is thrilling, your excitement shouldn’t be overshadowed by the responsibility of it all. Ultimately, it’s up to you to determine if you’re ready. Here are some common signs that you might be ready to buy your first home:
- You’ve Been Renting Long Enough – The average age to buy a house is 31, but sometimes life gets too busy and you push back buying a house till your 40’s. While that’s not always true, it does happen. When that happens, you look back at how much rent you’ve spent during that time. You’re probably thinking, Yikes! How much did I spend on rent?! Now, take those numbers and plug them into a home mortgage calculator. You should now realize you could be sitting on tens of thousands of dollars of equity if you would have bought a home years ago, instead of putting that money towards rent. If you’ve been renting for 2+ years and you’re fairly confident nothing drastic will change in your life in the near future, you’re probably ready to buy your first home. Remember, the longer you wait, the more money you lose that goes straight into your land lord’s pocket instead of your dream home and the more interest rates and home prices will rise.
- You Have a Reliable Source of Income – Let’s face it, money is usually the largest motivating factor when purchasing your new home. If you’re fresh out of college or living paycheck to paycheck, it’s not conducive to owning a home. However, if you’ve started a career and are confident that you will be continuing and growing with this chosen career and staying in the same city, then purchasing a home makes sense.
- Your Financially Prepared for What Lies Ahead – While shopping for and buying a new home is the fun part, what isn’t so enjoyable is having your fridge give out just weeks after closing. The days of calling your landlord to have the problem fixed are gone. In short, you’re paying for all sorts of things you didn’t have to before, but because you’ve saved and are financially ready, you’re ready for these sporadic costs. So in addition to having enough money to pay the down payment on a new home AND the 2.5% in estimated costing costs you need to close that property, you also need to have an additional small nest egg to pay for unexpected repairs.
- You’re Ready to Commit to One Place – The general rule of thumb – you need to live in your new home for at least five years before you regain the costs of buying it (ie. the closing costs). So, if you’re ready to buy a home think about a few things: 1) The city you’re living in. Do you love it? 2) Your job and job security. 3) Are you ready and willing to live in one neighborhood for the next several years?
- You Genuinely Want It – Home ownership isn’t for everyone. Look into buying a home because you genuinely want it. That means being ready for all the freedom, opportunities, and potential challenges that come with it.
Well? What do you think after reading those common signs? Are you ready to buy a home? If you have any questions about purchasing a home, feel free to reach out!
