At some point, you’ll ask yourself the question: “Is it time to buy a home?” The decision has never been more complex. With careers, priorities and housing markets more individual than ever, the issue of whether to buy or rent takes some careful thought. In the end, a few basic factors will help you determine whether you’re ready to take the plunge into home ownership.
Buying a home works best if you live a relatively stable life. Your lender will be happiest if you have a consistent income and a history of staying with the same job. Think about more than just financial stability, however. There are a few reasons why nearly 40% of US residents rent instead of owning a home.
Rental homes let you live a more free life with fewer financial responsibilities to weigh you down. So if you might be about to change your career or think you could be heading to another part of the country in the near future, it might not be time to buy a house right away. However, if you know that you’re where you need and want to be, you could be ready for the commitment of a home.
Consider Your Credit
Even if your finances are very stable, your credit might not be. Lenders prefer a strong credit history with a solid record of borrowing and paying back your debts on time. Take the time to go over your credit well before you consider buying a home. You may need to correct errors or spend some time shoring up a weak history. If you start keeping an eye on your credit at least six months before you think you’ll apply for a mortgage, you will be in a more favorable position.
There’s much more to buying a home than just the mortgage and down payment. Home buying comes with many hidden costs, such as broker fees, taxes and insurance costs. It’s also important for every new home buyer to set aside a “rainy day” fund for unexpected repairs. With careful planning, these hidden costs don’t have to come as a surprise. In many markets, they still cost less over time than renting, but they can add up and hit you when you least expect it. Financial preparation is key for buying your first home.
Ultimately only you can decide whether it’s time to buy or rent your next home. With careful consideration, however, you can be sure that the decision you make will be the right one! For more information about preparing to buy a home, download our eBook now!