When Are You Ready To Start Seriously Looking At Home Buying?
If you are the type of person who has always dreamed of owning real estate, you might be someone who also casually browses the homes for sale in your area. When is it time to get more serious about your search and potentially make a purchase? Here are some clues that you're ready to become a serious buyer.
You've Had (And Will Have) A Steady Income
When you have had a healthy income for at least the past 3–5 years, and you don't see any sign of that stopping, that's a great sign that you can handle the financial responsibility of home ownership. Once you own a home, there are a lot of potential maintenance costs and random expenses that come up. Having a steady stream of new income coming in will be critical if you run into any snags with your new home.
You've Built Up Your Credit
It's hard to even begin searching for mortgages and credit products if you haven't already brought your credit to the highest level you can get it. If you haven't paid much attention to your credit until now, one thing you will want to do is get a credit card. Make small purchases and pay them off every month. Also, pay down or consolidate as many existing debts as you can. Take a look at your free credit report to see if there's any negative information on your credit, or if there's something fraudulent on your credit report.
You've Made Strides in Your Community
The first 5–7 years of owning a home, you'll mostly be trying to recoup the closing costs and interest costs on your home. So if you only want to stay for a few years, or you aren't sure where your intentions lie, then renting may be a better option. Of course, there is the option of keeping your property and renting it out to someone else if you do decide to move. If you want to keep that option open, just make sure you're buying a home in a place that has both a strong buying and renting market. One doesn't always imply the other.
You Can Afford What You Want
If you're a casual real estate shopper, you are already a little bit ahead of the game. You probably know the general price range of homes in your area. Now, get some help from a financial planner to see if you have enough money to afford what you want. That includes putting down a down payment, affording insurance and mortgage rates in your area, and having money left over for other facets of life.