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7 Signs You’re Ready to Buy a House

For most of you, it is the American dream to own your home. But buying a home is a major financial decision, and therefore it is not something to be taken lightly. From coming up with a sizable down payment to getting qualified for a low rate mortgage, buying a home has its challenges. Here are 8 signs that you’re ready to buy a house:

Buying a house? Estimate how much you may be able to borrow. Get pre-qualified.

 1. You have a good credit score.

If you have a good credit score, say 730 or above, congratulations! It is one of the signs that you’re ready to buy a house.

A good credit score of 730 means that not only will you able to get qualified for mortgage loan, it also means you’ll get qualified for a better interest rate. And being able to get a better interest rate means that you will have lower monthly mortgage payments. This, in turn, means that you’ll save thousands of dollars on interests.

Click here to check your credit score with CreditSesame. It’s completely FREE.

2. You have eliminated most if not all your debt.

If you’re no longer paying off outstanding credit card debts or car loans, that extra cash can be used toward expenses that are associated with home ownership, such as property tax, insurance, repairs, maintenance, etc.

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3. You have a stable job.

If you have been employed for the same employer for at least 2 years, that’s a good sign you’re ready to buy a house. The longer you are with an employer or the number of years you have been as a business owner, the more likely your job will be seen as stable.

In fact, lenders, before they extend you a mortgage loan, looks at the length of your employment to determine whether you’re able to make the payments. 

Click here to compare mortgage rates through LendingTree. It’s completely FREE.

4.  You have a good emergency fund.

On top of your mortgage payments and regular monthly expenses, there are a lot of ongoing costs you’ll have to manage when owning a home. They include home insurance, property tax, potential renovation costs, etc…

You also have to consider life unexpected expenses, such as car repairs, medical bills, or you need to get a new washing machine.  An emergency fund is the amount of money you have set aside to help cover the cost of these unexpected and urgent expenses.

The rule of thumb is to have at least 6 months of living expenses in that fund. So if you have that amount of cash in that fund, it gives you piece of mind that you are ready to buy a house.

If you are interested in comparing the best mortgage rates through LendingTree click here. It’s completely free.

5. You can put at least 10 percent down payment.

If you have at least 10 percent down payment for a house saved, besides your regular savings and emergency fund, then buying a home is more of a reality than a dream. If you have 20 percent down payment saved up, that’s even better.

With a 20% down payment, not only will you avoid paying mortgage insurance, you will also have a lower interest rate and lower monthly mortgage payment. That also means you will be able to save up a lot in interests.

Read: How to Save For a Down Payment Fast

6. You don’t plan on moving in the next few years.

Buying a house is a huge, long term investment. People don’t typically buy a house in the hope to move out within 2 or 3 years unless of course it’s an investment property.

That’s what renting is for. So if you see yourself staying in the home for at least five years, then buying might be for you. At least by staying longer, you’re able to make or regain what you paid in transaction costs and you can actually make a profit when and if you decide to sell.

7. You have done your research.

Buying a home is a major life decision that takes into consideration careful planning, budgeting and research. If you’ve done your research thoroughly, you might be ready to buy a house.

Your research might include finding out how much house you can afford and how to find the best mortgage rates. Your might have also considered the costs in buying a home such as down payment, closing costs, inspection costs, legal fees, etc. If you have done all of these, then it means that you know what you want and you’re comfortable with the process. 

In conclusion, if you decide to buy, you’ll want to check out LendingTree to figure out how much home you can afford.

Don’t miss: 5 Signs You’re Not Ready to Buy a Home.

Related: Apply for a Mortgage Loan Today

Work With The Right Financial Advisor.

You can talk to a financial advisor who can review your finances and help you reach your goals (whether it is paying off debt, investing, buying a house, planning for retirement, saving, etc). Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.

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