Becoming a homeowner allows you to build equity and gives you more freedom to personalize a property. At the same time, you may wonder if you're ready to buy a house. Because it's such a significant investment, the idea can feel overwhelming yet exciting. Determine whether you're prepared for the purchase with the guide below.
4 Signs You're Ready to Buy a House
1. Reliable Income
Employment and a stable income will impact whether you can afford a home. Before looking for your first house, consider whether you'll earn the same amount in the next few years. You might also expect a raise or promotion, which can influence your decision.
As you browse properties for sale, get estimates on monthly house payments, factoring in expenses like interest rates on loans, property taxes, and homeowners insurance. If these combined costs amount to less than 25% of your monthly income, you can likely afford to buy a house.
2. Minimal Debts
Even if you can technically afford a home, significant debts often get in the way of making monthly house payments. For instance, outstanding credit card or car loan balances will continue to accrue interest over time. After making these payments, you might not have enough to cover the mortgage. Therefore, it's best to become a homeowner when you have little or no debt and a steady income.
3. Financial Savings
Savings are good indicators of homebuyer readiness, as the funds are valuable for emergency expenses. For example, they can help cover unexpected repairs and upgrades needed for an older home.
Money in your savings account provides a financial cushion, ensuring renovations or restorations won't leave you in a bind. For a secure emergency fund, save up to cover three to six months of expenses.
4. Plans to Stay Put
If you envision staying in the same city for the next several years, buying a home offers stability and provides your family a space to grow. By having a plan in mind, you avoid the inconvenience of purchasing a property and then needing to turn around and sell it within a few years. When exploring properties, look for a house in an area where you want to retire and spend your golden years in comfort.
If you're ready to buy a house, contact Color Door One. With over 10 years of experience in the real estate industry, they're capable of helping clients throughout Phoenix, AZ, purchase and sell properties. They also offer assistance with real estate financing and mortgage lending. Call (602) 575-5827 to ask about current listings in the area, and visit the website to learn how they can help you acquire your dream home.