How to know if you’re ready to become a home owner

The decision to become a home owner is exciting – and maybe a bit stressful. For one thing, the home buying process can be lengthy and feel complicated. For another, you might not be certain whether you’re fully prepared to buy a home. How can you know for sure if you’re ready for this commitment?

Every home buyer will have different priorities, budgets, and expectations for their future home. However, there are certain aspects of buying a home that everybody needs to have in place. If you can relate to the following statements, you’re likely in good shape to start thinking about becoming a home owner!

You’re ready to settle somewhere

One of the most basic, yet useful, questions to ask yourself before you buy a home is: Am I ready to live here permanently? When you become a home owner for the first time, you should be planning on living in that home for the long run. For example, you may be ready to buy a home if you have a job in a certain area, and you plan on staying there long-term. On the other hand, buying a home isn’t the best idea if you do a lot of back and forth, moving between cities and jobs. You can’t build home equity if you don’t own your home for a long period of time. You’ll also find the penalties for breaking your mortgage can be steep, so it’s best to avoid those if you can. 

Are you planning on becoming a home owner so you have a permanent house, as opposed to an investment property or temporary stay? If so, this is a good indicator that you’re ready for home ownership!

Your credit score is in good shape

Your credit score will have a major influence on your ability to become a home owner. Mortgage lenders take your credit score into account when they consider giving you a loan, which is of course one of the most important parts of buying a home. Higher credit scores give lenders more confidence in your abilities to make payments. It shows you’ve been responsible with money in the past, so lenders are more likely to approve you for your desired mortgage, with lower interest rates. 

However, lower credit scores might signal that you’ve had trouble making payments in the past. Lenders will often require a larger down payment on your end to protect them in case of a default. They may also only approve you for a smaller mortgage, with higher interest rates. Your credit score indicates how ready you are to become a homeowner, so be sure to make it a priority.

You’re prepared for unexpected expenses

When you rent an apartment, minor damages occur. You notify your landlord, and they take care of the issue without much worry on your end. Once you own a home, though, remember that these damages become your responsibility moving forward. 

You can’t always predict when you’ll need to spend money on your home. Leaks and cracks occur, as well as issues like broken locks and handles. These all become your expenses – if you’re prepared for that, you might be ready to buy a home. However, if you have no patience for these everyday issues, it’s best to hold off on homeownership. Owning a home comes with a number of annoyances, and you need to be ready for them.

You’re ready for competition

A person who is ready for homeownership is aware of the challenges ahead. Buying a home is never a stress-free experience, considering all the steps involved. Right now, though, it will be especially challenging. As we’ve mentioned many times, housing supply is low and prices are high, meaning it’s increasingly difficult to find a home in your budget. You need to be committed to your search, and be ready to make an offer on a home as soon as you find one you like. Be ready to deal with competing offers from other buyers, and make sure you have a good real estate agent to guide you. If you think you can handle becoming a home owner in a seller’s market, you may be ready to own a home.

You have an emergency fund

Every home owner should have an emergency fund set up for those rainy days. If you want to become a home owner, you should be planning and saving up not just for your expected housing costs, but for surprises as well. An emergency fund is a good thing to have in case you lose your job, or an unexpected bill comes up that’s beyond your everyday income. Basically, you shouldn’t be using all your existing money to pay for routine expenses. You never want to find yourself in a place where you need money, but don’t have any to spare.

There are a lot of factors to consider when you’re preparing to buy a home, and these are just a few important reminders. Another good step is to get in contact with an unbiased mortgage professional! You can get in touch with us at Clinton Wilkins Mortgage Team at (902) 482-2770, or contact us here.