Homeownership is an important milestone for most of us, but how do you know when you’re ready? Whatever the status of your finances, credit score, income level, and debt level may be, you should take a good look at your own situation honestly to see if you’re ready to make the commitment of homeownership. Here are 10 questions you need to ask yourself if you are considering buying a home:
#1. How much debt (credit cards, student loans, car payments, etc.) do you have currently?
a. I’m virtually debt free!
b. I have a few things I need to pay for still
c. I’m buried under a mountain of debt
#2. How long do you plan to stay in your location?
a. 5+ years
b. 2 to 4 years
c. less than a year to 1 year
#3. Do you like to save money?
b. I do sometimes
c. Not really
#4. How much down payment can you afford?
#5. Does your current income allow for, not just mortgage payments, but taxes, fees, and any possible maintenance?
a. Yes, I can comfortably afford all payments
b. It’ll be tight, but I think I can manage
c. I will struggle to pay for everything
#6. How dependable is your income source?
a. Very dependable
b. Stable, but I may be changing jobs
c. Shaky at best; I live paycheck to paycheck
#7. How much of your monthly income do you save for unexpected expenses?
a. 20% or more
#8. Are you willing to sacrifice parts of your lifestyle to accommodate the housing expenses?
a. Yes, I’ll do what is needed to purchase a home
b. Yes, but a little splurge here and there can’t hurt
c. There are things I still want to do and places to go
#9. Have you ever gone through a bankruptcy or repossession?
a. No, I have not
b. Yes, but a while back
c. Yes, within the last two years
#10. How well do you understand your own credit report?
a. I know my current score and how to repair negative items
b. I’ve seen the number, but not too sure what it means
c. I’ve never really looked into it
Mostly As: you have a handle on your finances and are ready to buy a house
Mostly Bs: you are on your way to homeownership, but need to iron out a few things before taking the plunge
Mostly Cs: you are better off saving money and sticking with rentals for now until your answers start morphing into A’s and B’s
What else do you think someone should evaluate before looking to buy a home? Ley us know on our Facebook page!