Deciding whether to become a homeowner is one of the greatest decisions you will ever make in your life. There is no doubt that choosing to fully own the roof over your head has a lot of good reasons. However, contrary to popular belief, this venture isn’t such a no-brainer as most people would presume.
With the added control that you get from owning a home comes a plethora of responsibilities. With the stability of being static comes a lot of dynamics and flexibility. With the chance to build equity comes a huge risk of losing your entire investment.
Here are ways to evaluate yourself and know if you are personally and financially ready to become a homeowner.
1. Evaluate Your Financial House
Are you struggling to pay your bills? Are you in any credit card debt? Are there any outstanding loans that you are still yet to pay? Are you in a suitable position to pay for the down payment? All these questions could very well help you understand just how financially secure you are before you decide to invest in a home.
Check out your credit score, it helps. Before you venture out into the home shopping market, you have to evaluate the orderliness of your financial house. Experts advise that you sit down and see if you are able to save for the down payment as this reflects your ability to save for the price of the house in general.
2. How Long Are You Able To Stay Put?
By the old rule of thumb, buying a home means you are planning to stay put for at least three to five years. If you are frequently encountering job changes or shifting from place to place due to your job or other circumstances, you are probably incapable of owning a home.
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These days, it is recommended that you invest in a home if you are seeing yourself staying put for at least seven years. This is because the transaction costs, along with the overall investments of buying a home are quite significant.
When you buy, there are the costs of securing the loan, closing the sale and moving, not to mention all of the miscellaneous items that can quickly add up to thousands of dollars. You, therefore, need to be sure that you are ready to stay put. Otherwise, you might be better off renting.
3. You Have A Reserve Fund Stashed Away
Owning a home has a lot of hidden expenses and future expenses that come with it. As such, aside from having a sizeable down payment, you need to have a reserve fund stashed away to cover these unforeseen costs.
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If you feel that you are adequately equipped with at least 6 months’ worth to cover the cost of your mortgage, utilities, insurance payments, credit cards, and other debt obligations, then you might very well be ready to own a home.
4. You Are Planning To Start Building Equity
Your home is an investment. A large one at that. You’re not only buying a home to live in, but you’re also building wealth over time. Every payment you make towards paying down your principal every month and appreciation in value over time both contribute to growing your home equity. In fact, one of the biggest benefits of homeownership is the equity that you can build as time goes on.
This equity can be used for some of the major expenses of life later on. Borrowing against the equity in your home affords you with a financial safety net. If you’ve got your eye on building equity, then homeownership is likely for you.
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5. You Are Ready For The Added Responsibility
One of the major differences between a renter and an owner is that, unless there’s a homeowner’s association, the buck always stops with the owner. As such, you will need to manage every little problem that arises either by yourself or by hiring someone else.
Are you ready to fix all the minor leaks, drafts, flickers, creaks, and cracks that are bound to appear over the years? If you are, then you are probably ready to become a homeowner.
The Best Choice
Choosing to become a homeowner is a huge decision. This decision, if made at the right time and for the right reasons, can be a big step towards aligning your future life goals.
As you keep track of all these ways to determine if you are willing to own your home, be sure that the choice is in line with your future life goals. If you are fully ready to become a homeowner, give Richard Realty Groups a call at 760-889-2455 and open up a new world!