In a recent post, we discussed the cost of building vs. buying a house; and since you are here reading this, you have probably decided that the latter is the best way for you to become a homeowner. However, even though buying a new house may be a quicker process than building one, and it is also better than renting, it is still a big decision.
Perhaps the question at the top of your mind now is, ‘How do I know if I’m ready to buy a home?’ Or ‘What if now is not the right time to buy a house?’ If you are asking yourself these questions, you have come to the right place. In this post, we shall discuss some of the signs you’re ready to buy a house in order to help you decide before making your move. Let’s dive in…
8 Signs You Are Ready to Buy a House
- Your current house doesn’t meet your needs
When you bought your current home or started renting, the place probably had everything you needed at the time. But your circumstances could have changed since then, and for various reasons, your house may no longer serve you.
For example, you probably got married and started a family, more people live in your house now, you currently work from home because of the pandemic and need a home office, learning space for the children, or to set up a gym, you need better access to amenities, insecurity in the area, your current house doesn’t have a backyard for the kids to play, or, perhaps, you aren’t allowed to keep pets. All these are signs it is time to buy a new house because your current home doesn’t serve your needs.
- You have a stable income
Buying a house is a big decision you have to give some serious thought before taking the step to move. For example, you shouldn’t consider purchasing a home if you aren’t financially stable or, at least, have job security. Having a stable income, whether from your job, side hustles, or business, is one of the clear signs you are ready to buy a house. With a stable income, you and the lenders can have more confidence in your ability to repay your mortgage or even buy the house in cash.
- You can afford it
Unfortunately, having a stable income doesn’t always mean you can afford to buy the kind of home you want. Hence, when looking for signs you are ready to buy a house, your next step is to evaluate your budget. Some questions to ask yourself before buying a home include;
- Have you saved the money to pay in cash or at least enough for the down payment on the house?
- After buying the house, will you still have enough money remaining for the additional costs you might incur as a homeowner? For example, closing costs such as taxes, title fees, insurance, repairs, renovations, and utilities, among others.
- Can you qualify for a mortgage loan and be able to repay it without straining or sacrificing too much?
If you can’t afford to pay in cash and are considering getting a mortgage to buy your first home, you can check its affordability using an online mortgage calculator. The best mortgage repayment calculator will enable you to estimate the monthly payments for various loan scenarios based on the home price, your income and debts, down payment, interest rates, mortgage amount, and the number of years to pay it off.
- You have a good credit score
Have you ever checked your credit score? If you think you are ready to buy a house, you must check your credit report because a low credit score can get your application for a mortgage rejected by lenders. Your credit score is a number from 0 to 999 that indicates your creditworthiness, that is, the likelihood that you will repay the loan on time.
So, what is a good credit score? According to Experian, in places such as the UK, a good credit score ranges from 881 to 960, and an average one is from 721 to 880. Having a higher credit score is one of the signs you are ready to buy a house because you have a better chance of loan approval and are likely to get favourable mortgage interest rates, thus reducing your monthly mortgage repayments.
If your credit score is low currently, you can raise it by always paying your bills on time, not maxing out your credit cards, requesting higher credit limits, checking for errors in your credit reports, paying down your credit card balances, and registering as a voter, among other ways.
- Have little or no debt
You can have a stable income, but if a large percentage of your money usually goes to paying off debts and house-related expenses such as taxes and insurance, then you aren’t ready to buy a new home. So, if you are looking for signs you are ready to buy a new house, make sure you have no debt or the one you have is manageable, whether that is school loans, car loans, or your current mortgage, if you are thinking about buying a second home.
READ ALSO: 8 Tips on How to Create a Minimalist Home
- You have done your research
Many people fail to conduct research when deciding to buy a home and purchase the first one that catches their eye. But you should keep in mind that buying a house is not a light thing, and you should spend time understanding the trends in the real estate market and other factors that affect the price of a home.
For example, it will be good to know when is the best time to buy a house in a specific area, where to get the best offers, a comparison of the prices of homes for sale in the neighbourhood, and where to get favourable mortgage rates.
Conducting your research and having all the information you need are signs you are ready to buy a house. When looking for your ideal home, you most likely want to get the best deal possible without having to compromise on what you want.
- You have to move to a new city
It is a no-brainer that when you have to move to a new city, you will need to find a new place to live. For example, if you get a job transfer or change careers and start a new job or business in a different town, you will have to rent or buy a house in the area, depending on what you can afford.
Other times when you may need to buy a house in a new city or country include changes in your current neighbourhood, your income has changed either upwards or downwards, you desire more independence, you need to take your kids to a different school, when you have to move out after a break up with someone, and when you want to live closer to your support system.
- You want to put down roots
Buying a house is a long-term decision because whichever home you purchase, you might get stuck with it for the rest of your life. As such, one of the signs you are ready to buy a new house is that you are okay with living in one place for a long time because you want to put down your roots.
Buying a house will be a good idea if you don’t expect any major life changes soon, such as having more kids, moving cities, losing a job, illnesses, or anything else that could change your plans for the future.
Having a permanent home will also be great for your kids, not only because it will provide a sense of stability as they grow up but also because the value of a house tends to increase over time. If the real estate market trends continue the way they are, the property‘s value will increase with time, thus fetch a higher price should your children ever need to resell it sometime in the future.
Since the pandemic started, we have learned the importance of making a good choice when buying a house because we now know we can find ourselves in situations where we are forced to stay indoors for an extended period. Nonetheless, sometimes we might want to move to a new place, but for various reasons, we may not be ready to become homeowners yet. In the above discussion, you have learned how to know you are ready to buy a house.
If you aren’t ready now, don’t give up on your dream of becoming a homeowner yet. Depending on the reasons why you want to get a new place to live, work on changing your circumstances using the tips above, and you might finally see the signs you are ready to buy a house.
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