Just like buying dark cabinets online, purchasing a home is one of the most exciting experiences that most of us will ever go through. On one hand, it symbolizes the fact that you’re ready for a new chapter in your life. On the other hand, it essentially means that you’re making one of the largest investments you’ll ever make. Therefore, it’s normal for you to experience a certain degree of stress. It’s also normal for you to be unsure if you’re ready to purchase a home. Today, we’ll take a look at some signs which indicate that you’re ready to purchase a house.
1) You Have Stable Income
One of the most evident signs that you may be ready to purchase a house is financial stability, or, in other words, how secure your income is. Most experts agree that you should be confident that your income will remain stable for at least two to three years and you should have a long history with the institution that provides employment.
Most lenders will check to see at least three years of pay stubs or tax returns as proof of income. In addition to that, lenders like to see that you deposited the down payment you wish to make in your bank account for no less than sixty months because they also see this as a sign of financial security. In the event that you’re self-employed and don’t get a weekly or biweekly paycheck, getting approved for a mortgage can be tricky. In a situation like this, documentation is crucial.
2) Emergency Fund
A good rule of thumb to go by is that you save enough money to live on for at least three to six months. An emergency fund can help to cover unforeseen expenses that go hand-in-hand with purchasing a house. Additionally, houses need regular repairs and maintenance. This is especially true for older properties that are in need of a few upgrades. Purchasing a house without having the money to address unforeseen issues is a recipe for foreclosure. According to Home Advisor, homeowners spend an average of $3,000 for regular house maintenance and another $1,600 in emergency repairs on a yearly basis. Realtor.com proclaims that a good rule of thumb to go by is to save one to four percent of the home’s value in your emergency fund.
3) Willingness to Make Sacrifices
In addition to being financially stable, you should take a look at how owning a home fits into your current lifestyle choices. For instance, do you like to go on vacations on a regular basis? Do you stay away for weeks at a time? Will the expenses associated with a mortgage enable you to continue to make the same lifestyle choices? If not, are you willing to make sacrifices?
Sometimes you need to take an honest look at your current lifestyle and determine if you truly are ready to own a home. This means that if purchasing a home will lead you to cut down on things you feel somewhat uncomfortable giving up on, maybe you need to hold off on purchasing a home for now.
4) Excellent Credit Score and No Debt
Another tell-tale sign that you’re ready to buy is if you have an excellent credit score and little to no debt. The last thing you would want is to owe an abundance of debt, such as a loan for a car, to eat away from the funds that you have available for your mortgage. Extra cash which isn’t going to debt can help to keep you financially secure as well as to increase your emergency fund. It also enables you to tackle maintenance and repair expenses, insurance fees, and property tax more easily. Therefore, if you have a decent amount of debt you still have to pay off, you should focus on that before acquiring new debt.
5) Tired Of Spending Money on Rent
If you’ve grown frustrated at the fact that you’ve been paying off your landlord’s mortgage as opposed to acquiring and paying off your own, it may be time for you to purchase a home. Buying a new house comes with a new sense of pride. It’s also a relief to know that your monthly housing payments are going towards something that you will own for the rest of your life. Additionally, buying a home gives you the opportunity to make upgrades that you aren’t able to in a traditional rental unit. Therefore, if you’ve grown annoyed at the concept of paying someone’s bills, you’re ready to acquire your own property.