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Ready to Buy a Home? 5 Questions to Ask Yourself

Most people are excited about homeownership, but not everyone is actually ready to buy a home. Before you make the plunge, review these five signs and make certain that you have what it takes – both financially and mentally – to buy your very first home.

#1 – Are You Planning to Stay?

Most people make the decision to buy a home because mortgage payments are lesser than rent, or because they’ll get far more square footage and luxury in their own homes for the same price. However, it’s important to remember that homeownership comes with other costs, such as insurance, mortgage fees, repairs, and maintenance. Unless you’re planning on staying for at least five years, you aren’t going to break even and start reaping the benefits of those lower payments.

luxhome 300x200 Ready to Buy a Home? 5 Questions to Ask Yourself#2 – Are You Preapproved?

These days, preapproval is an important step when you’re ready to buy a home. It’ll help you understand what you qualify for, which can help you (along with your real estate agent) make the right choices about the homes you see. This process can take some time, so make sure you’re prepared by getting it done early. Check with your personal bank, or if you wish, ask your real estate agent for options.

#3 – Is the Timing Right?

Take a look at your current situation. Are you stuck in a lease for another eight months? Do you need to find a place to live within the next 30 days? If you answered yes to either of these questions, then you may not be ready to buy a home. Ideally, you want to be ready to buy, but able to wait it out for the best deals. Right now, it’s still a buyer’s market, so take advantage of that.

#4 – Do You Have Money in Savings?

Aside from a down payment of as much as 20% of your new home’s purchase price, you should have a nest egg set aside for things like home maintenance, emergencies, and more. If you do not feel comfortable with the amount of money you have in savings, then the time is not right to buy a home. Wait until you are completely financially stable. Ideally, you should have enough money in savings to pay your mortgage for three to six months in the event you lose your income, too.

#5 – Are You Prepared for Bumps along the Way?

Television programming makes the homebuying process look incredibly simple. One day, a family is looking at a home; the next, they’re settled in and having the times of their lives. Unfortunately, this is rarely how it works. There will be some bumps along the way. You may have a problem during your inspection, or underwriters may find an issue with your mortgage application. If you feel prepared to handle these things, you’re ready to buy a home.

Whether or not you’re ready to buy a home depends on many things, but the five factors listed above will play an important role. Make sure you’re planning to live in your home for at least five years, you’ve obtained preapproval, the timing works for you, you have money in savings, and you’re prepared for a few things to go wrong. This will make the process as painless as possible and help you find the right home for your needs.

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