How do You Know if You’re Ready to Buy?
For many young adults, renting has become a simple fact of life, and with the economy only just starting to recover from its downturn in the early 2010s, so many people have found themselves unable to switch from survival mode to thriving mode. What many don’t know is that investing in a home can not only give you an emotional and financial anchor but can sometimes save you money on a month-to-month basis. Renting, while often necessary, is ultimately a black hole in regard to your personal finance; when you leave a rental, you walk away only with the possessions you put within, not the property itself. Land always has value, even in tougher economic times. However, knowing when to buy is not always as simple as walking out and picking a house you like.
This guide will help you get a better idea of when the time is right for you to choose a house of your own to make your home. Home, of course, is where the heart is, but the heart is undeniably freer when it is not troubled by an unfitting financial situation. Choosing to buy too early could cause undue stress, but holding off too long could mean wasting money that could be invested in something of permanent value. Here are some factors to keep in mind:
1. Credit
The first consideration in buying a house is whether you have the credit to do so. Few buyers are ever going to be able to afford a house out-of-pocket, so a healthy credit score is important for getting loans that are affordable, fair, and able to cover the costs of a house that fits your needs.
Many first-time home buyers may not even be aware of their credit score. Thankfully, there are numerous free services that will help safely check credit online. Some banks even offer this service for free. If your bank doesn’t offer free credit checks, or you are not sure of your credit score, try a website like www.Mint.com or www.creditkarma.com, which help users not only get but also understand their credit score.
Realistically, most first-time homebuyers will not be shopping for a luxury home, so the credit rating requirements might be more reasonable than many buyers would assume. Take the time to explore your credit score, your options to improve your credit, and the general credit rating requirements in the areas you’d like to live in.
2. Income and Job Stability
Buying a home is ideal when you have reasonable financial stability. Buying a home does not require an incredible income, but it does require the ability to regularly pay a mortgage payment. Sometimes, a mortgage payment can actually be less than the rent a buyer is used to, but because banks do consider income in loan decisions, you’ll need to keep income levels in mind.
Additionally, job stability is important on a personal level. Almost nothing is more stressful than getting a mortgage on a job that is unsteady.
3. Family
If you have a family, their readiness is possibly the most important factor of all. Children, pets, and even your hobbies can benefit greatly from having space that is totally yours to customize, improve, and enjoy. If you’ve got kids on the way, investing in a house in a good neighborhood can often set their childhood off to a great start.
However, it is certainly possible to have too much space. Single buyers or couples who aren’t yet ready to prepare for family life may wish to consider holding onto the rental for a bit while building credit, savings, and focusing on career.
Help from a skilled Santa Clarita real estate agent
Choosing to purchase a home is a major life decision, and there are many things to do and much to understand. If you need help with this process in the greater Santa Clarita area, call Brian Ends at (661) 964-1760 or contact him online. Brian is here to help you find the home inspector that you need.
