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Owning your home is one of the biggest adventures of your life. It creates a unique sense of pride and ownership. It also gives you a canvas to imprint your tastes, interests, and lifestyle on.
However, owning a home has proven particularly challenging for many individuals in recent decades. A variety of economic and lifestyle factors have held many back from being able to indulge in the financially exhausting activity of homeownership.
If you’re trying to decide if you’re officially ready to take on your own home, you’re not alone. Here are some of the biggest questions worth asking as you sort through whether or not you’re ready to buy a house.
Houses are often trumpeted as sound economic investments. They help you build up equity and avoid the need to throw away money on paying rent to a landlord.
While this is true, though, it’s equally true that houses are expensive. Very expensive. When you own your own home you have to pay for a variety of things, including:
- The mortgage;
- Home insurance;
- Property taxes;
- Maintenance and repair costs;
- Home improvements and renovations;
The list goes on and on.
On top of that, you’ll need a good chunk of change to buy the house itself. From realtor fees to taxes, down payments, moving costs, and more, there are plenty of ways to spend your hard-earned cash while buying a house.
The first question that you have to answer, then, is if you can afford a house in the first place. Do you have a solid and consistent income to pay a monthly mortgage? Can you save up extra money for repairs and unexpected homeownership expenses?
If you find that you’re considering wiping out your savings or emptying your nest egg early, you may want to think twice about your financial preparedness. Instead of moving now, consider protecting your retirement and rainy day funds and begin saving money specifically for a house.
However, if you have a decent amount of money set aside to offset up-front expenses and a steady stream of income to boot, you may be ready to leap.
Even if you have a sound financial footing under you, that doesn’t automatically equate to being ready to buy a home. While your present financial situation may be solid, it’s worth asking yourself if it will remain that way.
For instance, do you have any major expenses coming up? Are you fresh out of college and about to start paying for school loans? Do you have a wedding or birth on the calendar? The major expenses associated with these activities can put unnecessary pressure on your life if you also toss the added expense of a home into the mix.
For many, the topic of their career as a whole — not just the money that it generates — often doesn’t factor into the idea of owning a home. However, it’s often recommended that you plan on owning your home for at least three to five years before you move again if you want it to be financially worth the work.
This naturally leads to the follow-up question: is your career going to be stable for the next three to five years or so?
Another question to ask is if you’re considering pursuing a change in your career at any point soon. If that’s the case, can you look for a job in a good housing market with low prices that will appreciate in the future? You may even be able to find an employer with a good job relocation package that helps you offset some of the costs of buying a house and moving into your new residence.
Another concern is if you’re at the right time of life to buy a home. Have you recently graduated from college and decided it’s time to buy a home? There are a number of factors to consider before signing on the dotted line.
For instance, are you thinking of getting married? If you already are, do you plan on having kids soon? If you’re on the younger side of things, has your credit had enough time to build up to a good credit score?
From family dynamics to jumping the gun on your credit, your age and stage of life are both important factors when it comes to getting a good deal on your home.
Owning your own home isn’t formulaic. It can’t be. Everyone’s situation is uniquely different from one another. However, many common factors can most certainly help you judge how ready you really are to buy a home.
Things like financial security, a lack of major future expenses, having a stable career, and even simply being in the right time of life all factor into the mix. If you want to make the right decision, you must ask yourself the tough questions. Only then can you move into your homeownership journey with confidence.