How To Know If You’re Ready to Buy a Home

<article class="post-760753 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-760753"><span class="entry-date">August 2, 2023</span><div class="entry-header center-block text-center"><h1 class="entry-title">How To Know If You’re Ready to Buy a Home</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=How+To+Know+If+You%E2%80%99re+Ready+to+Buy+a+Home&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fhow-to-know-if-youre-ready-to-buy-a-home%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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</div></div><div class="post-tax post-category"><span></span><a href="../category/realtor-blog/index.html" rel="tag">Realtor Blog</a></div><div class="post-tax post-post_tag"></div></div><div class="entry-content"><div><img alt="How To Know If You’re Ready to Buy a Home Simplifying The Market" decoding="async" loading="lazy" src="https://media.agentaprd.com/sites/222/20230802-How-to-know-if-youre-ready-to-buy-a-home.webp" style="display: block; margin-bottom: 5px; clear: both; max-width: 100%;" width="358"/>
<p>If you’re trying to decide if you’re ready to <a href="https://www.simplifyingthemarket.com/2023/07/05/two-questions-to-ask-yourself-if-youre-considering-buying-a-home/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">buy a home</a>, there’s probably a lot on your mind. You’re thinking about your finances, today’s <a href="https://www.simplifyingthemarket.com/2023/07/19/explaining-todays-mortgage-rates/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">mortgage rates</a> and <a href="https://www.simplifyingthemarket.com/2023/07/25/dont-fall-for-the-next-shocking-headlines-about-home-prices/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">home prices</a>, 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.</p>
<p>While housing market conditions are definitely a factor in <a href="https://www.simplifyingthemarket.com/2023/07/04/americans-still-view-homeownership-as-the-american-dream/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">your decision</a>, your own life and your finances may be even more important. As an article from <em>NerdWallet</em> <a href="https://www.nerdwallet.com/article/mortgages/is-it-a-good-time-to-buy-a-house" rel="noopener noreferrer" target="_blank">says</a>:</p>
<blockquote><p><em>“Housing market trends give important context. But</em><strong><em> whether this is a good time to buy a house also depends on your financial situation, life goals and readiness to become a homeowner</em></strong><em>.”</em></p></blockquote>
<p>Instead of trying to time the market, it may help to focus on <a href="https://www.simplifyingthemarket.com/2023/07/03/evaluating-your-wants-and-needs-as-a-homebuyer-matters-more-today/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">what you can control</a>. Here are a few questions that can give you clarity on whether you’re ready to make your move.</p>
<h4><strong>1. Do You Have a Stable Job?</strong></h4>
<p>One thing to consider is how stable you feel your <a href="https://www.simplifyingthemarket.com/2023/07/13/how-remote-work-expands-your-homebuying-horizons/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">employment</a> is. Buying a home is a big purchase, and you’re going to sign a home loan stating you’re going to pay that loan back. That can feel like a big obligation. Knowing you have a reliable job and income coming in can help put your mind at ease. As <em>NerdWallet </em><a href="https://www.nerdwallet.com/article/mortgages/is-it-a-good-time-to-buy-a-house" rel="noopener noreferrer" target="_blank">explains</a>:</p>
<blockquote><p><em>“A mortgage is a big commitment . . . Wait until your employment is stable before thinking about buying a house.”</em></p></blockquote>
<h4><strong>2. Have You Figured Out What You Can Afford?</strong></h4>
<p>To make sure you have a good idea of what you’ll need to save and what you can expect to spend on your monthly payment, talk to a trusted lender. They’ll be able to tell you about the pre-approval process and what you can borrow, current mortgage rates and approximate monthly payments, closing costs to anticipate, what percent of the purchase price of the home you’ll need for a <a href="https://www.simplifyingthemarket.com/2023/06/19/saving-for-a-down-payment-heres-what-you-need-to-know/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">down payment</a>, and more.</p>
<p>The best part is you may find out you’re closer to your goals than you realized. You don’t necessarily need to put 20% down, unless it’s specified by your lender or loan type. As <em>Down Payment Resource</em> <a href="https://downpaymentresource.com/homebuyers/" rel="noopener noreferrer" target="_blank">says</a>:</p>
<blockquote><p><em>“A 20% down payment on a home is great, but . . . Many mortgages require no more than 3% to 5% of the purchase price as a down payment. Plus,</em><strong><em> there are loans and grants that may help cover these costs. Search for down payment assistance in your area, and discuss your results with your mortgage lender . . .”</em></strong></p></blockquote>
<h4><strong>3. How Long Do You Plan to Live There?</strong></h4>
<p>Another important thing to think about is <a href="https://www.simplifyingthemarket.com/2023/06/27/why-homeownership-wins-in-the-long-run/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">how long</a> you plan to stay put. It takes time to build <a href="https://www.simplifyingthemarket.com/2023/06/16/how-owning-a-home-grows-your-wealth-with-time-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">equity</a> in your home through paying down your loan and <a href="https://www.simplifyingthemarket.com/2023/07/17/home-prices-are-rebounding/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">home price appreciation</a>. 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 a recent article from CNET <a href="https://www.cnet.com/personal-finance/mortgages/advice/should-you-rent-or-buy-a-home/#to-rent-or-to-buy–questions-to-ask-yourself" rel="noopener noreferrer" target="_blank">says</a>:</p>
<blockquote><p><em>“</em><strong><em>Buying a home is a good idea if you’re planning to stay put for at least three years.</em></strong><em> Home values typically increase between 2% and 5% annually, so you could end up paying more in closing costs than you’d earn in proceeds if you sell after only a year or two.”</em></p></blockquote>
<p>So, think about <a href="https://www.simplifyingthemarket.com/2023/06/06/real-estate-is-still-considered-the-best-long-term-investment-1/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">your future</a>. 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.</p>
<p><strong>Above all else, the most important question to answer is: <em>do you have a team of real estate professionals in place?</em> </strong>If not, finding a trusted local agent and a lender is a good first step.</p>
<h3>Bottom Line</h3>
<p>If you’re trying to decide if you’re ready to buy a home, these questions can help. But ultimately, your best and more reliable resource is the help of trusted real estate professionals.</p>
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