You’ve done your research, you’ve saved up, and now you’re finally able to consider whether you’re ready to buy a home.
Since most people believe they’ll eventually become a homeowner, it’s easy to take this decision for granted. Before you buy, slow down and consider whether you meet the criteria to move forward with the next steps for purchasing your new home.
1. You’ve been approved for a mortgage and have your budget in order.
If you haven’t yet applied for a mortgage, then you’re not ready to buy a home. This is the first and most important step toward becoming a homeowner, and a lot of planning comes with it.
When you go to apply for a mortgage, you’ll estimate how much you can afford and will have a good sense for the type of home you should be seeking. You’ll also find out how much of a down payment you’ll need. These first financial steps toward buying a home are the foundation to your decision, so consider them very carefully and don’t skip the details.
After you buy a home, you’ll be locked into some large and continual payments, so it will be important for you to budget and plan exactly how much you’ll need for bills. There’s a difference between living a simple life to save and being able to budget specifically for bill payments. For some, this isn’t a major change to their lifestyle and just means having to track expenses more carefully. For others, serious planning may be in order.
2. You’re ready to settle down.
You don’t need to be at the perfect place and time to feel ready to buy a home, but having a free-spirited lifestyle can lead you to make some common home buying mistakes. Instead, ask yourself, “Will you have a steady income for the next five years?”
If you’re not sure of your answer – whether you’re unsure of your job security or intend to find a new line of work soon – now probably isn’t the right time to buy a house.
A significant other can help shoulder expenses, and in this case, you may still picture yourself as financially secure down the line. “Settling down” can sound as if you’re ready to get married and have children, but it’s actually a question of knowing you won’t be moving away or risking your source of income anytime soon.
3. You’ve narrowed your options.
Aside from knowing you’re stable and ready for a financial commitment, before you go all-in on a home, shop around. Don’t make any rash decisions at this point and compare each home carefully as you go.
A real estate agent can help you schedule viewings for multiple homes while communicating with current owners for you. This can be very helpful for home buyers, especially if it’s your first home buying experience or if you’re older and might have trouble keeping track of all the details.
Many real estate agents also suggest purchasing a home warranty or continuing the existing contract on a home warranty if the previous homeowner had one. If anything were to happen to an appliance after the sale of the home, a good home warranty provider would be there to connect you with a network of service providers. After-sale disputes can be tricky, but this way, the home will be continuously protected.