How To Determine if You’re Ready To Buy a Home
Buying Tips Laura Miller Edwards Realty Group July 24, 2024
Buying Tips Laura Miller Edwards Realty Group July 24, 2024
If you’re trying to decide if you’re ready to buy a home, there’s probably a lot on your mind. You’re thinking about your finances, today’s mortgage rates and home prices, the limited supply of homes for sale, and more. And, you’re juggling how all of those things will impact the choice you’ll make.
While housing market conditions are definitely a factor in your decision, your own personal situation and your finances matter too. As an article from NerdWallet says:
“Housing market trends give important context. But whether this is a good time to buy a house also depends on your financial situation, life goals and readiness to become a homeowner.”
Instead of trying to time the market, focus on what you can control. Here are a few questions that can give you clarity on whether you’re ready to make your move.
One thing to consider is how stable you feel your employment is. Buying a home is a big purchase, and you’re going to sign a home loan stating you’ll pay that loan back. That's a big commitment. Knowing you have a reliable job and a steady stream of income coming in can help put your mind at ease when making such a large purchase.
If you have reliable paychecks coming in, the next thing to figure out is what you can afford. That’ll depend on your spending habits, debt, and more. To be sure you have a good idea of what to expect from a number's perspective, start by talking to a trusted lender.
They’ll be able to tell you about the pre-approval process and what you’re qualified to borrow, current mortgage rates and your approximate monthly payment, closing costs to anticipate, and other expenses you’ll want to budget for. That way you can make an informed decision about whether you’re ready to buy.
Another key factor is whether you’ll have enough cash left over in case of an emergency. While that’s not fun to think about, it’s an important thing to consider. You don’t want to overextend on the house, and then not be able to weather a storm if one comes along. As CNET says:
“You’ll want to have a financial cushion that can cover several months of living expenses, including mortgage payments, in case of unforeseen circumstances, such as job loss or medical emergencies.”
It was mentioned above, but buying a home involves some upfront expenses. And while you’ll get that money back (and more) as you gain equity, that process takes time. If you plan to move too soon, you may not recoup your investment. For example, if you’re looking to sell and move again in a year, it might not make sense to buy right now. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains:
“Five years is a good, comfortable mark. If the price of your home appreciates considerably, then even three years would be fine.”
So, think about your future. If you plan to transfer to a new city with the upcoming promotion you’re working toward or you anticipate your loved ones will need you to move closer to take care of them, that’s something to factor in.
If not, finding a trusted local agent and a lender is a good first step. The pros can talk you through your options and help you decide if you’re ready to take the plunge or if you have a few more things to get in order first.
If you want to have a conversation about all the things you need to consider to determine if you’re ready to buy, let’s connect.
This blog post previously appeared on https://www.simplifyingthemarket.com/en/2024/07/16/how-to-determine-if-youre-ready-to-buy-a-home?a=106260-312309902871c1f0d820820f58bf8fde. The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. and the Laura Miller Edwards Realty Group do not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. and the Laura Miller Edwards Realty Group will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
Stay up to date on the latest real estate trends.
Housing Inventory
If you’re debating whether or not you want to sell right now, it might be because you’ve got some unanswered questions.
Down Payments
For over 79 years, Veterans Affairs (VA) home loans have helped countless Veterans achieve the dream of homeownership.
For Buyers
Here’s a sneak peek at the most common missteps buyers are making in today’s market and how a great agent will help you steer clear of each one.
Pricing
With the 2024 Presidential election fast approaching, you might be wondering what impact, if any, it’s having on the housing market.
For Sellers
If your goal is to sell your house in 2025, now’s the time to start prepping.
Selling Tips
Seeing your house sit on the market without any bites is the ultimate frustration. Selling a home quickly in a shifting market requires a strategic approach and an in-… Read more
Agent Value
When it’s time to buy or sell a home, one of the most important decisions you’ll make is who you’ll work with as your agent. That choice will have an impact on your en… Read more
For Buyers
Most first-time homebuyers qualify for programs that can help with that upfront expense. But few actually take advantage of it.
Mortgage Rates
After months of high rates keeping buyers on the sidelines, things are starting to shift. Rates are already coming down due to a number of economic factors.
Get assistance in determining current property value, crafting a competitive offer, writing and negotiating a contract, and much more. Contact us today.