Don’t be scared to take on the commitment of being a homeowner
as it’s one of the most fulfilling financial moves you’ll make in your life! Nothing
compares to the excitement of buying a home. Yes … it’s a major step, but it’s
also a major investment.
Not everyone is ready for what comes with owning a home,
especially the maintenance and mortgage payments. Some people are more afraid
of the process of buying a home than actually owning a home.
Here’s how you know that you are ready to take those next
- You are decisive and know how to make
informed decisions about your future. If you change your mind every 5
minutes about what color shutters you want or what direction you’ll be facing when
looking out your bedroom window, then maybe you should postpone the buying
process. After all, if you have a hard time deciding on the small things,
imagine what it will be like when it comes to the tougher decisions, such as
deciding on where you will live or
negotiating on price.
- You have researched the home buying process
and know what to expect. Researching ahead of time allows you to set realistic
expectations. Home buying is a process (the key-word here being “process”) and
doesn’t happen overnight.
- You have a good credit score. The truth
is that lenders won’t lend to someone whose credit score is not at a certain
level. A good credit score shows that you are responsible and are capable of
making loan payments. Find out what your loan company considers a good credit
- You are financially secure and responsible
with your money. A constant flow of income is necessary for making mortgage
payments and for the upkeep of your home. Yes … a mortgage may be the same
amount as paying the rent for your last apartment, but leases are a lot shorter
than your 30-year mortgage. And you must be prepared for added home expenses.
- You have a down payment and purchase
budget. Typically, a down payment is 20% of the cost of the home. Think
about how much house you will need and factor this into how much you want to put
down on a home. If it’s just you, a spouse, and possibly a pet, don’t overdo
- You have a good chunk of money set aside
for emergencies. And by emergencies, I don’t just mean personal
emergencies. This goes for home emergencies as well. What if you discover
termites, your basement floods, or your roof leaks? Be prepared for whatever extra
home expenses may come your way.
- You have little to no outstanding credit
cards or debt. Your perceived debt can include your credit card limit (your
allowable amount you can charge) and even back
taxes. Whatever the case, taking on more debt when you already have debt is
not the best financial move.
- You are ready to take on the joys and
responsibilities of owning a home. It’s all on you – lawn maintenance, home
repairs, and other expenses. Know what you’re getting into before taking on
You may consider talking to your family and friends about their home
buying experiences so you’ll know what to expect. If you feel that
homeownership is right for you, check out the Homeownership
& Taxes page on our website for important tax-related
information. Good luck in your home search!
Disclaimer: Tax Lounge is an informational source for industry news and related topics. We take every effort to provide you with the most honest and accurate tax information, but this information should not be a substitute for professional tax advice. Use our office locator to find your local tax office or click here to subscribe to our free newsletter.