Am I ready to buy a house?

First Time Home Buyers Guide: Am I ready to buy a house?

Lydia Taylor July 9th, 2007

Are you tired of paying rent? Have you always dreamed of owning your very own home? Are you unsure if you can make that dream come true? There are some basic things to evaluate in your life to see if you are ready to buy a home.

First, are you living in an area that you plan on staying in for at least a couple of years? If you think that it is possible that you will not be living in the area for an extended time, it might be a mistake to buy a home. It takes time to build equity in the home and time for the market to increase in value. If you purchase a home and leave in less than 2-5 years, chances are you will not have built the necessary equity to sell your home without losing money.

Second, are you committed to maintaining a home? Apartment living and renting a home usually means that there are maintenance personnel that take care of exterior repairs, lawn service, appliance repairs, and keeping the structure in good repair. These are all things that you would assume responsibility for once you purchase a new home.

Third, are you prepared to carry the cost of owning a home? This includes -but is not limited to- general maintenance costs, yard maintenance costs, home owner’s association dues, insurance and taxes (if not in escrow), and utility bills like gas and water (that are not paid by renters). If there is major damage to your home in inclement weather, consider that you will be responsible for paying the deductible. This is all on top of your normal living expenses that you are currently paying. Then there are the one-time additional expenses as well- such as a lawn mower and other lawn tools, a refrigerator, a stove, washer and dryer…

Fourth, are you financially stable enough to pay a mortgage or be approved for a home loan? If you are have credit card debt, or are living pay check to pay check, then now may not be the best time. That situation might prevent you from qualifying for a loan in the first place, or even worse get you into a situation where paying a mortgage might be overwhelming.

If you understand and feel confident that you can handle these responsibilities, then you are ready to own your own home. Owning your own home can be work and it should not be taken lightly, however it can be a rewarding experience. Homes are where memories are made, and a place that you can make your own.