It’s easy to get caught up in the allure of renting, but owning a home can be a strong financial decision, while also fulfilling a lifelong goal, and signifying a new chapter in your life. Investing in a home will mean you’re building equity and ownership, plus putting roots down in a location that means something to you. So, how do you know if you’re ready to buy a house? It’s a big decision, but if you identify with any of these points, it may not be as far-fetched as you believe.
You Manage Your Money Well
The first indicator that you may be ready to purchase a home is your bank account. If you have a sizable amount of money saved up that you can put towards a down payment, this will demonstrate to a lender that you’re a reliable borrower. Early on in the preparation phases, you may be asking yourself, “what house can I afford”? Realistically, this can be determined even before applying for a mortgage by your choice of location, current debt-to-income ratio, etc. Using an online calculator, or some calculations of your own, to determine this amount, can give you the confidence needed to make the jump and begin the home buying process.
If you’ve paid off your debts or are consistent in making payments, in addition to your regular expenses, this is a good indicator that you’re financially responsible. On top of this, if you’ve managed to store away some extra money in savings, this may mean you are better equipped for emergencies and can allocate funds towards everyday repairs and maintenance, property tax, insurance, potential HOA fees, and more.
You’ve Established a Strong Credit Score
Going hand-in-hand with strong financial wellness is your credit score. If you’re consistently paying your bills on time and have a high credit score, you’ll be in a good position to buy a house and more confidently be approved for a loan by your lender.
Reversely, if you’ve found that your credit score is low, this may be an indicator that you’re not ready to take on the financial responsibility of homeownership. To remedy this, you should take a look at your monthly bills, make a budget, and organize your expenses. Once you’re able to prove that you can keep up with payments, reduce your debt, and continue to work towards better credit, you’ll be better prepared for bigger purchases like home buying.
You’re at a Stable Place in Your Career
Maintaining a consistent stream of income by being employed by a company or running a business for longer periods of time is viewed favorably in a lender’s eyes. It also may serve as personal proof that you’re established in your career and finally comfortable within the industry and position you’ve settled into over the years. This may also mean you’re ready to settle into a more permanent living situation. Talking to your REALTOR® about preferences can mean you’ll find a home that complements your career, whether it’s in a certain area or neighborhood close to the office, or it has a spacious home office for remote work.
You Want More Space
If you’re feeling cramped in an apartment, it may be another sign that you’re ready to take on more space and own a property. This can be a very exciting prospect, as it means more space to make your own, decorate, store things, and grow into. Living less cramped and cluttered means you’re going to be more relaxed and comfortable in your own home, which will, in turn, improve your daily routines and therefore your mental health. If you’re sharing a living space in an apartment and growing tired of it, this may be another way to take a step towards independence.
Choosing to upgrade to a house will also make it easier to expand a family, have yard space for a pet, create a home gym, entertain guests, and more. It will truly be a space you can call your own and endlessly alter throughout the various stages of your life to fit your needs.
You’re Ready to Stay In One Place
There is often a time in everyone’s life when exploring new cities and constantly moving around is an exhilarating prospect. If you’re past this point and getting ready to slow down a bit and stay in one place, you may want to start looking at homes. If you’re married, have kids, or are expecting a baby, expanding into a more sizable space will ensure you’re comfortable for years to come. On the flip side, if you’re supporting your aging parents as they move in with you, finally buying a home can be a helpful way to accommodate all of your family member’s needs.
You’re Tired of Renting
Last but not least, the decision to start the home buying process could stem from frustrations regarding ownership. Though your landlord or property owner may be the ones responsible for repairs and upkeep, they’re also the ones who are making the money. By foregoing rent payments and taking on a mortgage instead, you’ll see long-term benefits in the form of home equity and financial stability, which is a great investment in your future.
Bottom Line
Deciding whether or not homeownership is right for you is a topic of discussion that you may be having once you become serious with a significant other, get settled in your professional career, or are just looking for a new level of financial stability. Though owning a home is an investment of your time and money, those who do choose to take that step in life will be in for an exciting undertaking. If you’re looking for a REALTOR® to get started, let’s connect so you have a home buying expert in the field at your fingertips who knows the ins and outs of today’s market.