Buying your first house can be exciting. It may also be a little bit daunting. That’s perfectly normal: It’s a big step, both financially and in terms of your day-to-day lifestyle. It’s natural to want to be cautious and make sure you’re making a prudent, fully vetted decision.
The question is, how do you know when homeownership is the logical next step in your life? It varies from one person to the next, but there are a few good omens and positive signs you can look for. Here are five pretty clear indicators that you may indeed be ready to buy your own place.
5 Signs You’re Prepared to Buy a House
You plan on staying put.
Buying a home usually isn’t the best option for those who are transient, or whose immediate future is unclear and unsettled. If you think there’s a decent chance you’ll be moving to a new city or a new state within the next few years, buying a house may be burdensome… and financially unwise.
The magic number, according to most lenders, is three years. If you think you’ll be settled for at least that long, then you have a good chance of recouping your investment in the home. If you think you’ll be moving within three years, however, you may want to put off homeownership.
You need the space.
This one is pretty self-explanatory: If your apartment or rental house doesn’t have enough room for you, it’s probably time to seek a bigger place. Often, the most financially advantageous way of doing that is buying rather than renting.
Certainly, if you are expecting an addition to your family, homeownership can be logical. This includes having a new baby or inviting an elderly family member to come live with you.
You have the salary to support it.
Can you afford homeownership? It’s probably a lot more attainable than you think. Here’s some basic math you can do: Multiply your annual salary by 2.5, then add the cost of a down payment. (More on that in a minute.) That’s the ballpark estimate of how much you can afford in terms of a home loan.
And as for the down payment, the conventional wisdom posits that you have to put down 20 percent when you buy a house. Actually, that’s not really true. These days, there are some wonderfully flexible loan products available, including some where you can get a house for as little as three percent down. I’m happy to connect you with a local lender if you’d like to learn more.
Your credit card debts are minimal.
Having a little bit of debt is not the end of the world, and it definitely shouldn’t keep you from pursuing homeownership. In fact, lenders may like to see that you can handle a little bit of debt and make payments in a timely fashion.
Here, the rule of thumb is that if your credit card debt exceeds seven percent of your monthly income, you may want to hold off on getting a mortgage. But if your debt’s lower than that, homeownership may be within reach.
You have a stable job.
If you’re settled where you are, not just geographically but professionally, and if you foresee some steady income in your future, that may be the best sign that you’re ready to buy a house.
Homeownership generally isn’t advised for people looking to switch careers; make one big life change at a time! But if you’ve found the job or the company where you know you’ll be happy for the foreseeable future, then you may want to think about laying some roots.
Ready to Buy a House in Charlotte?
If you’re ready to buy a house in the Charlotte area, I encourage you to reach out; I’d love to show you some of the possibilities! Connect with Ryan Minges Real Estate at your next convenience.