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Deciding Whether You’re Ready to Buy a House


  • Signs You’re Ready to Buy Your Own Property

     

    There are plenty of reasons for buying your own home, ranging from the purely personal to the very practical. But before pulling the trigger, there are some things for consideration. It’s ultimately up to you to determine if you’re ready for the responsibility.

    Determine your financial situation

    Owning your own home comes with a slew of new expenses, so good money-management skills are a must-have. You need to know where you are financially at the moment. You should realize where your money is coming from and where it goes every month. It is necessary to know exactly how much you can afford to spend on a new home. Find out how much your mortgage payment will run while speaking with your real estate agent. Don’t forget also about the utility bills, homeowners insurance, property taxes, homeowners association fees and other upkeep. It’s never a good time to buy if you understand that you cannot simply afford the expenses that come with a house.

    Find out the amount of initial costs

    If you don’t serve in the military or you don’t have a family member who has served, you cannot get the VA loan. Conventional financing will require a higher credit score and a bigger down payment. Traditionally, you’ll need a down payment worth 20 percent of the home price. Don’t forget to factor in closing costs, which will cost you from 3% to 6% of the purchase price.  These are property taxes, initial repairs, moving expenses and decoration costs.

    Get your money organized

    Buying a home is a serious step, so you’ll need consistent cash flow to cover the monthly payments that comes with homeownership. If you have less than reliable job or you plan to start a family, take a good look at your future abilities.

    Think about your future expenses

    Will you be able to make your mortgage payment six month from now? Are you going to get married soon? Are you making big life changes that can affect your financial situation? Many couples can afford the house when they are both working, but when a baby appears and one stop working they have a problem.

    Have the emergency fund

    If you have enough money to cover three to six months of your living expenses, you are better prepared to homeownership. In case of unexpected layoff or illness you will have a financial cushion to cover your expenses.

    Be flexible about your first home

    Your first home may not have all the things you want. Don’t be upset, in a few years you may be able to buy a home that better suits your needs. Remember, renting is easier than owning a home in many ways. Homeownership is not for everyone and you should be emotionally ready for the potential challenges that come with it.

    Don’t plan to move in three to five years

    Be ready to stay in your new home at least three to five years. If you sell before then, you may lose money on the deal. If you don’t think you’d stay put for that long, you may be better off renting. Renting gives you the flexibility you need and could possibly save your money. 

    Be ready for the responsibility

    The home improvement can make your new house truly yours. But if you’d used to call a landlord for anything that goes wrong with your home, buying your own may be challenging for you. Owning a place comes with new responsibilities, headaches and costs. You are your own landlord. Will you have the time, desire and energy to maintain the property? Make sure you are ready for what you’re getting into.

     

     

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