Buying your first home takes desire and commitment not only to navigate the complicated and time-consuming purchase process but also to make sure that you are ready to take up a homeowner's responsibility.
Maybe you've dreamed about buying. Or perhaps you've researched homes for sale online or tried to calculate how much you can afford to spend or peeked inside a few open houses. But are you really ready, emotionally and financially, to step up your game and make your move? Here are a few tips to help you decide if you are ready for homeownership.
1. Employment situation feels secure
Buying a home might seem like a no-brainer if your mortgage payment would be less than the rent you're paying. But that comparison doesn't account for other costs of homeownership, including down payment, mortgage-related fees, and home maintenance expenses.
When you buy a home, you should know you're going to stay for a minimum of five to seven years, and longer is better. If you try to do everything you need to do to make that house yours and then you turn around and sell it after three years, you're not going to break even and you are at risk of the market.
If your employment situation feels secure and you are prepared to stay in one place for a while, you might be ready to buy.
2. Have good savings
Even if you're emotionally ready to own a home, you need to be sure that you have sizeable savings. You not only need enough money for your down payment but also to have extra funds for moving expenses and home maintenance costs.
3. Pre-approved for a mortgage
Very few people have enough cash to buy their first home without a mortgage. Rather, most need financing to afford today's home prices. Realtors know that very well, which is why many won't spend much time with would-be buyers who haven't had a serious talk with a mortgage professional.
It is important for you to make sure you're preapproved for a mortgage loan. The loan approval process is no different for first-timers than it is for experienced home purchasers.
4. Timing
Timing is another crucial element in homebuyer readiness. For example, if your lease doesn't expire for many months or you need to move within 30 days, buying a home might not be practical for you. The ideal situation is to be ready to buy and able to wait especially if the housing market is hot in your city.
5. Have realistic expectations
First-time buyers often believe buying a home will be easy. Giving up that misconception and being realistic about the time, effort, money, stress, and hassle involved is an important step toward being ready to move forward.
Most first-timers think buying will be a perfect scenario where it all happens as it does on TV shows. They see three houses. They pick one, and it all works out beautifully. Unfortunately, that never happens. Instead, prospective buyers who are successful understand that they might run into some bumps, but the end product is going to be a home they love.
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