Applying for a mortgage is a dream many Americans hold. Being able to live your life or raise a family in your home offers security and stability in a way that renting can’t always offer you.
While there are many pros and cons to homeownership, especially with demand currently outstripping supply in the US right now, knowing when you are ready to purchase in more ways than just financially can help you make that next step.
How do you know you are ready to buy your own home?
Your Finances Are In Order
Your credit score is the key that can open the door to homeownership or keep it firmly locked for now. Ideally, your credit score should be over 800 for the best rates and terms, so make sure your finances are in order, you have paid down your debt, and make the most of the credit available to you.
Look at the Mortgage Lending Products available for you to make an informed choice of your options and what your repayment schedule will likely be once you have been accepted for your mortgage.
You Can Afford The Downpayment
Saving for a downpayment can greatly increase your chances of being accepted for a mortgage. The more you can put down, the more favorable you will look to the lenders.
You Can Afford The Fees
There are many different types of fees and payments associated with buying a house, and when you close on a sale, you will be required to pay predetermined fees such as survey fees, closing costs, arrangement fees, insurance, and so on.
You Can Afford Home Owner Fees
While your mortgage payments may be comparable to what you are currently paying in rent, the mortgage repayments aren’t the only payments you need to make when buying a house.
- Property taxes
- HOA (homeowner’s association) fees
- City assessments
- Water, sewer, and/or garbage
- Other utilities your landlord may currently cover in your rental payment
You Are Ready to Settle Down
Unlike renting, where you can move once your lease is up when you buy a home, you need to sell your home to move. Renting affords people the option not to be committed to property or giving in the same area for a long time. If you are ready to stop and settle down and put some thought into your future, then it can be a good indicator that you are ready for the responsibility of buying your own home.
You Can Afford The Upkeep
One of the massive benefits of renting your home is that major repairs are someone else’s problem. Hole in the roof? All the landlord’s problems. Damp and mold in your rooms? Landlords problem and so on. When you own a home, all of these issues you might not have considered before are now your problem.
Replacing kitchens, bathrooms, remodeling if required, or even ripping out flooring and rearranging the layout are all costs you will need to pay should you undertake this type of work.
If you have the income to put towards the upkeep of your home and keep it in good condition, then you are well placed on the responsibilities of owning your home.
This is a collaborative post.
I don’t own my home, and to be honest, I am glad I don’t!
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It’s a lot of work to keep up a house.