Many emotions come with buying property, such as nervousness and excitement. It’s a new chapter in your life that you’re eager to embark on, but sometimes, hesitation seeps in and leaves you wondering if you’re ready. How do you know when it’s the right time to buy a house? Let’s take a closer look at the signs you may be ready to own a home and some indicators that you might not be ready yet.
Signs You’re Ready To Own a House
Owning a home is exciting for many young people, especially if it’s their first home—it’s an extension of their independence. Being able to say you own property is a long-term goal that many have.
You might wonder if it’s time to get in touch with financial services about the process of getting pre-approved for a mortgage and searching for the best Realtors in your area. If you notice these signs you’re ready to own a home, get in touch with an agent to learn the next steps toward home ownership.
You’re Ready To Settle Down
The biggest thing to ask yourself is whether you’re ready to settle down and enjoy life at your own pace. Once you leave the renting world behind, you know what you want in a house. Whether you’re looking to start a family or not, being ready to settle down is the most straightforward sign that you’re ready to own a home.
You Have Savings Accounts Set Up
One single savings account is good for keeping emergency funds. However, having multiple accounts in good standing proves you can afford a home. You have enough to satisfy needs for the house, such as handling home renovation projects or ensuring you have enough to cover the down payment and other closing fees. Having money saved up is a surefire way to determine if you’re prepared to browse and buy on the market.
You’re Financially Healthy
Savings is essential, but how are your general finances? Everything from student loans to credit card payments can reflect how well you do with money. If you find yourself caught in a hole, you need to pause because a home isn’t possible right now.
The best way to get pre-approved for a mortgage is to have a DTI (debt to income) ratio of less than 45 percent. You might be below or equal to the percentage if you’re on time with payments, you spend what you need to, and your credit card usage is below 30 percent.
One way to figure out if you’re below 45 percent is to use this math equation: in parenthesis, write out your total monthly payments and divide the amount by your monthly income. Then, multiply that answer by 100, and you’ll have your answer. If that number is at or below 45, then you’re in a better position to buy a home.
The Market’s Looking Good From Here
While you might have everything working in your favor, sometimes the market isn’t right, especially if you’re looking in a less sought-after area. It might be best to speak with your agent about looking around your desired location so you can see what’s available.
Overall, a good market should have plenty of listings. If there’s an abundance of properties to pick from and good competition, you’re in a good place to buy or sell.
Your Credit Score Is Above Average
While it’s true that any credit score above 500 can guarantee the chance to buy a house, it might not be in your desired range. Say you want to buy a home in a good neighborhood with amenities nearby in a great school district, and your spending limit is between $300,000 and $500,000.
While that’s a good range, your lender may not approve a mortgage for that high of a home cost if your score’s below 680. Your score plays a big part in pre-determining mortgage rates, so if you plan to buy something higher, address your credit score.
If you’re in good standing, you’ll get good offers and lower interest rates. The higher your score is, the less interest you’ll accrue on top of payments.
You Haven’t Job Hopped
You might be prepared to buy a home if you have a well-paying job for at least two years. A worker who’s gone from job to job may have difficulty finding a home loan because there’s no evidence of steady income flow.
Signs You’re Not Prepared To Buy a Home
Although there are indications that some would be ready to work with an agent and go through pre-approval processes for mortgages, there are ways to tell if you’re not ready to buy a house. Here are three surefire ways to tell if you aren’t ready to buy a home.
You Don’t Know if You’ll Stick Around for a While
If you aren’t comfortable in your area, you might not be ready for a home. Buying a house means having a permanent place to stay, but if you’re unhappy with where you are, you may not be ready to put down roots.
If you need to do soul searching to find your true happy place, then do it. You shouldn’t feel obligated to stay in a space that doesn’t fit your lifestyle.
While deciding, consider giving yourself a timeline of where you’ll be in the next five years. Do you see yourself living in the same town you are now? When you have a steady job, have good financial health, and are ready to seek a permanent location to live, then you’ll be ready to buy a home.
Lenders Can’t Approve You
Lenders can’t approve someone with a low credit score and a mountain of debt. Work with a financial advisor and utilize phone apps to manage payments so you can pay off debts. You don’t want to add another loan to your debt without having a handle on expenses and a reliable income flow.
Buying Doesn’t Fit Your Routine
Some enjoy the ability to live where they want and go where they want to go without feeling held down in one place. If you prefer moving around and enjoy the freedom of renting, you’re probably not ready to buy. Factor how often you move into your home buying decision.
When Is It Time To Buy?
You’re the best judge when it comes to deciding when’s the right time to buy a home. Keep in mind that home is something you must tend to often, meaning you must handle repairs, renovations, and property taxes. If you’re not ready for these responsibilities, hold off on buying.
Take time today to sort through your plans for the future; if today’s not the day to purchase a house, that’s OK. There’s always next year.
However, if you are looking to buy or sell, you’ll likely need to make some updates. Bear Mountain Custom Painting ensures every home’s curb appeal makes a lasting first impression on homebuyers. We can also help you make your newly purchased house feel like home. Contact us today to help you with house painting in Atlanta, GA, and for ideas on how to transform your property.