Becoming a homeowner is a huge milestone in a person’s life. It can feel like an overwhelming and risky transition, which is why it’s so hard for many people to commit to owning their own place. Buying a home is an individualized decision that can’t be based on the ever changing real estate market. Here are a few signs to tell if you’re ready to make the big step and buy a home.
You know how to manage a budget. The mortgage rate isn’t the only thing you have to be worried about. Unexpected repair costs and renovations add up quickly, so being able to keep track of finances is essential for a homeowner. Making a mock up budget for your future home could help figure out whether you are financially stable enough to buy and maintain a house.
You have a steady job. Homeownership requires thinking about long-term scenarios. If you have a reliable source of income and will be able to pay a mortgage for several years down the road, buying a home is a probable option for you. If you plan on having children in the future, make sure you take those new finances into consideration as well.
You have a good credit score. Keeping track of your credit score can significantly decrease interest rates on your mortgage. A credit score of 720 to 740 will get you the lowest rates, but scores as low as 620 have been able to take out loans. Don’t know your credit score? Check out AnnualCreditReport.com, a website owned by the government that allows people to see their credit reports.
You want a long-term commitment. If you’re looking to settle down in a spot for at least three years, buying a home could be the best option financially because that’s how long it takes to be able to regain the costs of buying and selling. Turning a profit can even be a viable option when selling the house in the future. Do some in-depth research in order to find a house you will be comfortable living in for a long time.