Buying a home is a wonderful investment, but it can also feel very intimidating. It will likely be one of the biggest—if not the biggest—investments you will ever make in your lifetime. So it’s important to have confidence going into the process that you are ready to buy.
If you’re asking yourself how to be ready to buy a home, you’ve come to the right place. This post is packed with the information you need to know if you’re ready to take the next step and buy a house.
How do you know you’re ready to buy a home?
Here are 12 signs you are ready to buy—
1. You have saved enough money for a down payment.
Saving for a down payment is a good place to start when getting ready to buy a home. So how much should you save? In an ideal world, it’s great to save at least 20% of the price of the home you want to buy. That said, there are many loan programs in place today to help people who are in less-than-ideal situations or who haven’t yet been able to save much money. Don’t let potential down payment numbers scare you from taking the next step in your home-buying journey.
2. You have a great credit score.
Your credit score is a number that ranges from 300 to 850 and indicates to lenders whether you are credit-worthy. Several key factors—including your amount of overall debt and consistency to pay your bills—factor together to determine your credit score. If you plan to apply for a conventional loan, it is recommended that you have a score of at least 620. But again, loan programs exist for every kind of credit score.
3. You can comfortably afford a mortgage payment.
It’s easy to fall in love with the perfect house or neighborhood and lose sight of how much house you can afford. So ideally, it’s best to start with the mortgage you can comfortably afford and then look for a house that fits your budget. A good standard for how much house you can afford: Spend no more than 28% of your monthly income and no more than 36% of your income on overall debts.
4. You are comfortable with the current market.
When asking the question, “Am I financially ready to buy a home?” one of the most important factors is the current housing market. It’s best to buy a home when the current housing market favors buyers over sellers since the more competitive the housing market, the higher the counter offers will be. Also, the more competitive the market, the higher the likelihood for disappointment since sellers can entertain other offers and essentially choose other buyers. If the market is currently not favorable to buyers and you can afford to wait, take the time to save money and pay down any existing debts.
5. You have steady employment.
Steady employment is important both before you buy a home—since lenders want to see that you can afford to pay them back—and after you buy a home—since you’ll need money to pay your mortgage. Lenders generally prefer that you prove consistent employment for at least the past 2 years in order to qualify for a loan. If you haven’t been employed in the same job for the past 2 years, you will likely need to provide additional documents to demonstrate employment history and consistent income.
6. You can afford surprise expenses.
When you’re renting an apartment and your air conditioning quits working, it’s frustrating, but when you own your home and your air conditioning quits working, it’s expensive. And air conditioning is only one thing on a list of items you become responsible for when you sign the dotted line. This shouldn’t deter you from buying a house, but it should definitely give you pause. It’s a good idea to plan at least 3.6% of the original price of the home for yearly maintenance.
7. You are planning to stay in the same area long-term.
Typically speaking, houses don’t make the best short-term investments. Obviously it’s impossible to know your long-term plans with certainty. But when it comes to buying a house, you want to stay in it as long as possible in order to regain your investment and hopefully make a good profit. When asking yourself, “Are you ready to buy a home?” one way to answer that question is to consider how long you want to stay in the area. Experts recommend you stay in a house at least 5 years before trying to sell.
8. Your future goals are aligned.
What are your hopes and dreams for the future? Do you hope to start a family? Do you want to build a business? These questions may not feel as applicable to the house-buying process, but your future goals are very much impactful on the type of home you should buy. Your mortgage, for example, will impact how much of a business loan you may be able to get. And the number of bedrooms in your house may impact how quickly you need to move if you have kids. Don’t just buy a house for the life you have right now; buy a house for the life you want five years from now.
9. You know what you want.
Until you know what you want, either every house or no house at all will meet your criteria. And nothing will be more frustrating. This is where a good realtor or real estate agent can help you narrow down your wish list. One quick tip—it has been said that the three most important things in a house are as follows: location, location, location. You can love the quirks and imperfections of a house if you love your neighborhood and neighbors.
10. You want more control of your property.
If you’re tired of living in a rental property where you can’t even paint the walls without asking permission—or if you want the freedom of changing the landscape or building an edition—you may be ready to buy. Nothing gives you more freedom or a greater sense of satisfaction than owning the place you call home. If you understand that, it may be time to take the next step.
11. You’re ready for more responsibility.
Buying a house is a big step with big responsibilities—especially if you hope to maintain or improve the value of your home over time—but more responsibility can be a good thing. Once you’re ready to roll up your sleeves and tackle the maintenance challenges that come with ownership, you’re ready for the final step …
12. You’re ready to commit.
As you know by now, owning a home is a big commitment. In fact, it may be one of the biggest commitments you ever make. But it can also be a commitment that brings you great joy. If you can enthusiastically answer, “Yes!” to each of the items on this list, then you may be ready for one of the most rewarding commitments of your life.
Why purchase a home in one of Charter Homes neighborhoods?
For three decades, our team at Charter Homes has been creating beautiful places that are truly as special as the people who live here. The result of all these years of creativity, learning, and hard work has become what is known today as The Great American Neighborhood®, and we’d love to show you around.
From single family homes to townhomes and carriage homes, we’ve poured our lives into creating the ideal neighborhood where you will want to live and create a legacy for years to come. As long as you’re working toward owning your own home, why don’t you schedule a tour or call today so we can show you what we’ve learned and encourage you on your own journey to becoming a homeowner.
