Purchasing a home is one of the largest financial decisions you may make in your lifetime. While there are many benefits to home ownership, it is not something you want to jump in to until you are sure that you are ready. Here are a few questions to ask yourself to determine if you are ready to buy a home.
- Are you planning to stay? Buying a home may seem like the right thing to do if your monthly mortgage payment would be less than paying your rent, but if you’re not planning to stay in the home for five to seven years, it may not be worth it. There are other costs of home ownership such as down payments, mortgage related fees, home maintenance and repair expenses that can make short-term home ownership more expensive than renting.
- Is the timing right? Timing is another crucial element in homebuyer readiness. If your lease doesn’t expire for many months, or you need or move within 30 days, buying may not be a practical option right now. Flexibility is key. The ideal home buying situation is to be ready to buy if you find a home you want, but also to be able to wait if you don’t find the right fit.
- Have you saved enough for a down payment and other expenses? Saving a sizeable amount for your down payment, your emergency fund, moving expenses and home maintenance costs is another factor in being ready to purchase a home. If you do not have enough money saved for these things, it is probably best to wait to purchase a home until you do.
- Is your income reliable? When you take on a mortgage, you’re entering into a serious long-term financial commitment. You need to be confident that you will be able to afford your mortgage payment a year from now, and even 10 to 20 years from now.
- How is your credit? While your credit score does not need to be perfect to apply for a home loan, it is important that you have a good credit history as well as a decent score. There are several free services available to you to check your credit score. I can help you better understand what kind of credit score you need to apply for a home loan.
Contributed by Ashley McKenzie-Sharpe
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