The right time to buy a house varies for everyone. The real question is, are you ready to take the leap? The decision of when to buy a house depends on multiple factors. And we’re here to help you decode factors to understand if you’re ready for homeownership or not. We’ll help you figure out whether buying the home shortly is a smart move or not—right now.
Here are five signs you are ready to buy a house.
You have a stable employment income to buy a house
Have you worked at the same job for at least two years? Then you might be ready to buy a house. Why?
Lenders will need reassurance that you have enough money coming in and will continue to do so for the foreseeable future to cover the mortgage. Proof of that comes in the form of stable employment history.
To verify this you might be asked for W-2s for the last two years. If you’re self-employed, you’ll need to show tax returns for the last two years.
Your financials for a house are in order
Before you look at houses, take a closer look at your credit card debt, auto, student and personal loans.
We’re not saying that you cannot have any debt in order to buy a home, but I believe debt can be a hindrance. Debts can mean you don’t have enough money.
If you need to use a credit card do not buy a house. It will pose as an additional income.
Moreover, your credit score is what a bank will use to determine how well you handle credit—before sanctioning a home loan for you.
You have saved enough for a down payment
Your down payment will be the single largest investment you’ve ever made. The down payment will also come with multiple unforeseen costs that are associated with your acquisition. Insurance, repairs are furnishings are a few of the many costs involved in turning the house into a livable home. These costs will easily add thousands of dollars to your bottom line.
What’s worse is that not having money to fix up your dream home when you buy it. Leaving your house with plain white walls or a bathtub you don’t want. If you can afford a down payment that allows space for upgrades after the purchase, then you are on the right track to homeownership.
You are ready to settle down
You know you’re ready when you have a stable income coming in, and you have little to no debts to pay off. You’re ready to buy a house when and when you don’t constantly job-hop a lot. You know you’re ready to buy a home when you’re not buying a house because everyone else is. But here’s a thought, if you really want to buy a house without losing too much money, why don’t you consider renting your current home when you plan on moving out of the area. Want to invest in real estate? Turn your current homes into rentals.
You can fix a leak
Want to become a homeowner, you have to be able to fix your own problems. It’s probably the biggest difference from being a tenant.
This time you can’t call the landlord when there’s a leaky sink or a broken dishwasher. You should be prepared both financially and psychologically for these little surprises—it’s a part and parcel of being a homeowner.
If you can check all of the above five requirements –voila, you’re ready to buy a home. Owning a home is somewhat similar to having children. It’s a blessing, but that doesn’t mean you need to rush into it (it can get expensive!)
Buying a home can be a big decision. And it’s not so much about “when” as it is “who.”
Only you know truly who you are and how much you can afford and how much you can’t.