Thinking of Buying Your First Home? Here are the Signs that You May Be Ready
Are you thinking of buying your first home? Well, first of all, congratulations! Making the decision to buy a home is one of the biggest steps you’ll take in your adult life. Not only are you setting your sights on securing a future and putting down some roots, but home buying is also one of the biggest purchases you’re ever going to make.
When you’re ready, home ownership is an incredibly rewarding experience. But, you must be prepared. While it is an exciting experience, buying a home can also be a very stressful experience, especially if you’re going through the process for the first time. You see, renting and owning are two entirely different things. Home ownership requires not only mental preparedness but financial security, as well. It’s not a decision to take lightly. So, to help you determine whether or not you’re ready to purchase your first home, we’ve compiled a list of necessary elements for your consideration:
Do you have job security?
Job security and having a steady, predictable stream of income is absolutely essential if you want to purchase a home. Much the same as rent, you will have to take on a monthly mortgage payment. However, unlike renting, your mortgage payment will also include property taxes and insurance costs, additional costs that many first-time home buyers don’t consider.
Are you ready for a commitment?
While you’ve probably given a lot of thought to what the house itself will be like, you may not be thinking about all of the additional expenses that are going to come with it. Unlike renting, you will no longer just be able to pick up the phone and have your landlord come over to fix your toilet or pay to repair a broken HVAC unit; all repairs will now fall on you. You may need to replace a refrigerator, or the roof as your home ages, or any number of things. Are you prepared? If the prospect of these additional expenses makes you nervous to the point that you know will far exceed your budget, you may not be ready for the commitment just yet.
Do you have positive cash flow?
Positive cash flow is another crucial element to home buying preparedness. You should be bringing in more income than you’re spending on everyday expenses, including debt payments. If you’re carrying any debt, let alone a great deal of debt where you’re only able to make the monthly minimum payments, then you must get that in order before taking on an additional mortgage.
Have you saved enough for a down payment?
Too often, when home buyers are faced with coming up with a down payment on a house and don’t have excess cash on hand, they take money out of their retirement accounts or 401(k)s. This is not a smart idea. This mistake will only cost you in the long-run, as you will lose years of compounding interest. So, instead of losing money, prepare early, and open a savings account specifically dedicated for a home down payment.
Are you ready to put down roots?
Once you’ve sorted all of the necessary financial elements of the home buying process, all that’s left to ask is whether or not you’re ready to put down roots. A home is a place all of your own that provides stability and comfort. It is also an investment that requires thorough research, preparedness and commitment. If you’re buying a home just to build equity, you may want to rethink your reasons for wanting to purchase in the first place. Your home should be a place where you’ll want to build a future.
Home buying has so many wonderful benefits, if you’re ready. So, if you’re still weighing the pros and cons of renting vs. home buying, or you’ve made the decision to become a home owner and want to make a decision based on smart financial preparedness, these considerations can help, and so can we. Give us a call when you’re ready. We’re here to help you secure the future of your dreams.
