If you love perusing online real estate listings, visiting open houses, and binge-watching HGTV, you likely dream about owning a house of your own. And you’re certainly not alone. According to Time Shatter, around 5.99 million existing homes were sold in the US in 2017, with brand-new homes bumping up that number even higher.
But along with being one of the larger financial investments you’ll ever make, buying a house can be a daunting endeavor that requires a lot of consideration and planning. Before you even get into the purchasing process, you need to be sure you’re ready for the responsibility of being a homeowner.
It can be stressful to buy a house — after all, it costs a lot of money. If you've been thinking about it for a while, though, and have a good plan on how you're going to make it work, it might be time to do it. Here are 14 signs that you're ready to take the leap and buy a house.
1. You’re Ready to Stay in One Place for a Few Years
Leading a seminomadic lifestyle can be fun when you’re younger, and renting is a great option for someone who wants to try out different neighborhoods. But eventually you might get the urge to settle down. If you know you want to stay in one place for a few years, then owning a home could be a good option for you.
2. You Want to Have Control Over Your Own Space
When you rent, you have to follow certain rules that limit how much you can change your living space. Things like paint color and replacing fixtures often must be approved by the owner, and any large changes are completely out of your hands. (On the flip side, however, that means that you're also not responsible for annoying repairs.) If you’re itching to have control over your own home, then ownership can give you the freedom to tackle anything from renovations to a total tear-down. That said, when things do need fixing, it's on you to make that happen. If you're ready for complete control — and responsibility — home ownership might be up your alley.
3. You Need More Room
If you’re single or you live with a partner, a one-bedroom apartment can suit you just fine — and a two-bedroom suite can seem downright spacious. But eventually you might find yourself needing more room. Factors like kids, at-home hobbies, and a home business could mean that you require an extra bedroom or an office. And if you’re looking for more space, you might want to invest in your own property as opposed to moving into a rental house and paying someone else’s mortgage.
4. You Can Manage the Mortgage, Taxes, and Utilities
When you rent, you need to budget for your monthly rent check as well as utilities if they aren’t included in your lease. But when you own a home, there are a few more expenses that you have to manage. A mortgage, utilities, taxes, and potential townhouse/condo fees can definitely add up, so be sure to do the math before you think about buying.
5. Your Debt Is Under Control
Unless you have the cash to buy a home outright, you’ll need a mortgage. To be approved for a mortgage, you need to have your debt under control. If your credit cards are maxed out, or you still owe a chunk of your student loans, it might not be the best time for you to buy a house.
6. Your Credit Score Is Decent
If you’re going to need a mortgage to buy a home, banks and lenders want to know that they can trust you to pay them back, which is why they’ll take a close look at your credit score. This score is based on your past spending and timely repayment activity. According to Time Money, credit scores range from 300 to 850 (some versions can go as high as 900), and anything above 720 is considered excellent. If you’re not sure what your credit score is, you can check online using various credit score apps and websites.
7. You’re Realistic About the Market
If you’ve ever watched House Hunters, you’ve probably groaned over the fact that couples with limited budgets seem to be able to buy massive homes. While that might be a realistic option in some locations, the housing market varies widely from area to area and year to year. Before you decide to buy a home, be sure you have a good idea of what you can actually afford.
8. You Can Afford a House in Your Desired Neighborhood
Renting a home can be easier on your bank account than owning, especially if you live (or want to live) in a popular area where the price of real estate is prohibitive. If you can’t afford to purchase a home in your desired neighborhood, but you definitely want to live there, then you might want to stick with renting.
9. You Have a Down Payment Ready
To buy a home, it’s suggested that you have 20% of the total cost ready for a down payment. That means if you’re looking at a property that costs $200,000, you’ll need to put down at least $40,000 cash. If the homes you’re eyeing are in the range of $500,000, then a $100,000 down payment will be needed. Before you decide to buy, be sure you can manage the up-front cash costs.
10. You Have an Emergency Fund
When you buy a home, not only will you want enough money in your bank account to cover a down payment and moving costs, it’s also a good idea to have an emergency fund at your disposal to help you with any unexpected financial requirements. An emergency fund can be key in keeping your head above water if the unexpected happens.
11. You’re Ready for the Upkeep and Maintenance
As mentioned, taking care of a home takes a lot of work, and when you rent, you can rely on an owner, superintendent, or building manager to take care of the nitty-gritty. But when you own a home, you not only need to manage the day-to-day upkeep but also have to handle everything from leaking pipes to roof repairs. If you’re handy with tools, then you might be able to manage the minor to medium jobs yourself. But when the larger issues crop up, you need to be prepared to track down and call in the experts. And that also costs money.
12. You’re Prepared for the Legalities
Owning a home means delving into the legal world. First, you’ll need a lawyer or real estate agent to help you with the paperwork when first purchasing a place. If any problems arise once you’re a homeowner, you might need to consult legal counsel to help you deal with tricky legalities.
13. You’re Ready for the Emotional Roller-Coaster
Buying a home might seem like a dream, but it can also be a nightmare. It’s almost impossible not to get your hopes up while bidding on a home and anticipating a happy call telling you your offer has been accepted. But when you lose out on the place you’ve been eyeing, it can be heartbreaking. And that happens — a lot! Before you get into the real estate market, be sure you’re ready to step aboard an emotional roller-coaster.
14. You’ll Be Able to Sell When the Time Comes
Buying a home might be your way of getting into the real estate game, but the first place you purchase will more than likely not be your last. The majority of homeowners begin with a smaller house, townhouse, or condo and then work their way up to something larger. Selling your first home can be just as emotional as buying your first home, so be sure you're prepared to sell when the time comes.
