Top Signs You’re Ready to be a Homeowner

Buying your first house is one of the big things in life that makes you feel like you’ve entered adulthood. 9 out of 10 young people consider owning a home one of their goals for the future, but the recession has taken a toll on how many members of the Millennial generation can actually afford to take that step. What does it take to be a responsible homeowner? Buying a house is less about how old you are and more about how prepared you are. It’s a financial investment, where instead of throwing away money on rent, you’re paying for your own property and amassing value in it for your future and your family. It takes a lot of consideration and planning, and before you think seriously about house-hunting, you should evaluate where you are in life and whether you’re ready to make the commitment. These are some of the questions you should be asking.

1. How Bad are Your Credit Problems?

These days, nobody has flawless credit. Among families with credit card debt, the average amount is around $16,000, which makes it one of the most pressing problems faced by American consumers. If your credit is bad, it can be difficult to get the bank to finance you. Although there are more programs available than usual to help people get home loans, you could limit your options or find yourself needing a larger down payment if you haven’t cleared up your credit issues. And the simple fact is that if you’re already struggling with too much debt, adding on the responsibility of a mortgage is not the best idea.

2. Are You Prepared for the Cost?

Your monthly mortgage payment will probably be on par with your rent, but you can’t make the mistake of thinking it’s all you will owe. Taxes, insurance, and fees can double the monthly price, depending on your property. You also have to factor in utilities, some of which you probably aren’t paying if you rent, such as water, gas, and trash. When you sit down to negotiate a mortgage loan, the lender will help you figure out how much you can afford, but experts usually recommend you do the math yourself before you even walk into their office. It can be a lot to figure out.

3. Do You Feel Settled?

In order to take on the commitment of paying a mortgage on your first home, you’ll want to have steady employment, hopefully in a career where you can advance. You should also be planning to stay in your house a while, or to feasibly rent it out. This is the reason most people buy a house when they’re getting married or preparing to start a family. Most real estate agents say that you have to stay in a house for at least five years to recoup the costs of buying and selling. Planning for at least five years is a good rule anyway. If you have kids or plan to have kids, you will want to consider the neighborhood, school district, and community where you can feel most at home.

4. Do You Have Savings?

You need money for a down payment on a home, which can currently be as little as $10,000, but the more you have saved up, the better. Not only that, but it’s wise to have emergency funds in case of an accident, illness, or unforeseen problem in your family. Your house could need repairs, too. Unlike when you were renting, you will be fixing the leaks, replacing the insulation, and applying the grout when needed. If your home is less than perfect when you move in, you will probably need some money to fix it up. And you will probably want to – most people love home projects where they can build on their investment and make their space as fabulous as possible.

If you get excited by the prospect of owning a home, you have good reason. There’s nothing like mowing a lawn or sweeping a kitchen when you know it belongs to you, and it can be one of the biggest decisions of your life. But just like all big decisions, you want to do it right. It’s never too late to start off on the right foot.

Editor’s Note: Robin Knight is an author who loves going to open houses she finds in the real estate listings in Alexandria, Virginia.

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