Broker Blog: Signs That You Are Ready to Buy a Home

It is no secret that buying a home is one of the most significant financial decisions you will make in your life. While there is nothing wrong with renting, there comes a time in one’s life where they feel they are ready to take the plunge and invest in property. There are many factors that can determine your level of readiness when deciding to purchase a home, and no two people are alike. Some may settle down and buy their first home at 21, others may not feel the need to buy until they are well established in their careers. Whoever you are and whatever your circumstances may be, there are a few boxes you can check to indicate whether you are ready to ditch the rent and invest in a home.

1) Your Finances Are in Check

This one may be obvious, but there are many hidden figures that people may look past when reviewing their financial stability. What does your debt look like? How good is your credit score? How much do you have saved up? These are all questions that, if you are able to confidently answer, you are moving in the right direction towards becoming a homeowner

  • Having some debt is okay, especially when it is manageable enough to make those (future) monthly mortgage payments. 
  • Getting that debt paid off will then result in a higher credit score. Lenders’ rates will differ, but having the highest score possible will lead to better interest rates and lower monthly mortgage payments.
  • Having a strong savings account is a good indicator if you are ready to own.

2) You’re Ready to Settle Down

With renting, you are not tied down to a specific property or place for too long. So, when you have your eyes on that dream home, you will want to be certain you are ready to stay in that location for the next few years. In order to make a profit on your investment when you sell, it is encouraged to stay in your home for 4-10 years. Having kids, landing a promising career, favorable school districts, staying close to friends and family are all values to take into account when deciding if you are ready to settle down for a length of time.

3) You Can Afford a Home

Can you afford a down payment? Having at least a 10% saved on top of your savings totals is a key gauge on if you’re ready to make that investment. Having more than 10% is even better, and can help relieve the Private Mortgage Insurance requirements. Being able to confidently take that first step with healthy down payment can be telling on whether you can afford a home or not. 

New buyers can be deceived into believing they can afford the same monthly mortgage payments equal to their current rental payments. But is this true? Homeowners need to take into account insurance, HOA fees, assessments, property taxes, utilities, and more. 

Yes, you may be able to afford your monthly payments, but will that be all you can spend? It is important to make the necessary calculations to make sure you can afford other things such as vacation, eating out, hobbies, etc. It is not fun to find yourself house poor after purchasing property!

 

4) You’re Ready for the Responsibility 

Gone are the days of relying on a landlord to fix those annoying issues around your place. After becoming a homeowner, it is up to you to either fix that leaky pipe or resource a plumber to do it for you. This hidden cost is a huge factor to consider when determining if you are ready to own a home. While maintaining a home may seem daunting, it will only pay off in the long run when you decide to sell. If there is no hesitation when faced with this new and important responsibility, you may be ready to buy a home.

When deciding if you are ready to move on from renting and buy a home, it is obvious that there are more than a few components to consider before diving in. This list is a great starting point in measuring your readiness to move forward in the home buying process. For some, maybe you need to rethink what you thought you could afford. For those of you who glided through without hesitation, you could be at a point in your life where you are ready to commit to this hefty investment. 

 

Blog by: Andrew Cellucci

630-335-1155  |   andrewc@fultongrace.com

Andrew Cellucci joins Fulton Grace Realty with a robust resume in Chicago real estate, of note his superior service and attentive discipline from intro emails to the closing table. After attending the college of DuPage, Andrew gravitated toward the arts but amidst the housing crisis in 2008, shifted his priorities to management and client relations. After cultivating a rich rolodex of clients from a myriad of industries, Andrew went on to become a powerhouse in the real estate industry. Although he denotes his influence and success as simply “fun” – something he prefers to keep simple for his clients while also successful. He truly loves what he does and aims to leverage his passion for every single transaction.  

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