23 Jul Are You Ready to Buy a House? | 5 Questions to Ask Yourself Before You Buy
Buying your first home is an exciting step, but how do you know you’re ready? Spend some time answering these questions before you place any offers!
How much can I (really) afford?
Take a good, hard look at your current living expenses, don’t forget to consider the following:
- How much will your down payment be? The better your down payment, the more manageable your mortgage.
- How much debt do you owe? This includes medical bills, student loans, car payments, etc. Factor in ALL of it.
- What’s your income? Yes, this is obvious, but map out your income to the very last penny. Subtract your living expenses, monthly savings, and a realistic amount of “fun” money. What’s left?
All things considered, can you afford to add a mortgage into the mix?
How long have I been (and will I be) at my current job?
You might not want to do your current job forever, but is it (relatively) stable? If you were to lose your job for any reason, what are your odds of finding a job with a comparable salary and benefits in the area?
If you’ve been working in your current position for a couple of years and feel confident in your ability to stay where you are or successfully move on to another job that would cover your living expenses, you may be ready to take on a mortgage.
If your income is less predictable and you’re less confident in the job market in your area, hold off until you’re on more stable footing.
How much will I have after moving and closing costs?
Closing costs are no joke, and moving is expensive.
From hiring movers or taking time off of work, to do it yourself projects, to seemingly minor purchases like an area rug that fits the new living room, costs add up fast. If you can’t cover closing and moving costs without depleting your bank account, it’s best to stay put and build up your savings.
Can I fix things (or pay someone else to fix things)?
What things? All kinds of things. Homeowners deal with leaks, cracks, faulty appliances, landscaping issues, and all sorts of maintenance.
When the dishwasher in your rental blows up, you can place a phone call to your landlord or leasing office, and voila: it’s fixed.
If something in your own home breaks, it’s on you to take care of it. No, you don’t have to grab a toolbelt and literally fix it yourself everytime something breaks–that is, if you have the resources to pay someone else to do it.
If you don’t have the know-how and financial resources to cover home maintenance, stick with renting for now.
Where do I see myself in 3-5 years?
Possibly the most annoying question you’ll hear during a job interview, it’s also something you need to consider before placing an offer on a house. Are you really ready to commit?
If you see yourself relocating for work or moving abroad in the next 5 years, you don’t need a house (and the bills that come with it) holding you back.
Remember, your house should be your place to rest and unwind. Not a financial burden that leaves you “house broke,” stressed, or restless. There’s no shame in holding off until you’re truly ready and able to confidently invest in your first home!