Wondering If You Are Ready To Become A Homeowner? Answer These Questions To Find Out
Owning a home has long been considered part of the American dream and there are many benefits to doing so. But buying a home, especially if it is your very first real estate purchase, is a big decision that comes with serious responsibilities that must be considered. If you have been wondering whether you should stop renting and buy a home of your own but have doubts or fears, answering the following questions can help you determine which path is best for you at this point in time.
1. Can you afford to be a homeowner?
Your financial situation is one of the most important factors in deciding whether to continue renting a home or if it is time to start looking at real estate for sale. In most cases you will need to make sure that you have the financial capability to:
- meet the expected monthly mortgage payments and other fixed housing expenses without using more than about 25% of your net monthly income
- have savings sufficient to cover the closing costs, down payment, moving expenses, and the first few months of mortgage payments
- have savings or funds available to handle any remodeling, redecorating, or renovations costs needed for the home you choose
2. Will your life be better if you own your own home?
If you have the financial resources to purchase, the next step is to determine whether the quality of your life will improve with home ownership. Will you and your family enjoy more convenience, more space, or a safer neighborhood as a homeowner than you currently do as a renter?
3. Do you have plans to remain in your current area for at least the next several years or is a move expected within the next five years?
While nobody can predict the future, it is best to consider purchasing a home when you are reasonably certain that you will be remaining in the area for at least a few years. Doing so means that you will be able to better recoup the costs of the home purchase or potentially earn a profit when you do sell.
4. Are real estate market conditions right for buying a home?
The last point to consider in whether or not you should buy a home now or remain in your rental home is the condition of your real estate market. Since real estate market conditions can vary widely around the nation, you can best determine the condition of your local market by speaking with a successful, experienced real estate professional in your area. They will be able to help you consider local market conditions as well as all the other factors involved in purchasing a home to determine if now is the right time for you to become a homeowner.