Are you ready to buy a house: 3 key signs it might be time

“Am I ready to buy a house?” Decades ago, it wasn’t a question we used to ask. We used to simply know we wanted a home, then we’d apply for a mortgage and move on in. Now, it’s not as simple. Home prices, rates and the cost of living are all up, making it tougher to know if a house fits into your budget. You also have to understand closing costs and the pre-approval process and save for a down payment.

But despite all the obstacles, the dream of buying a new home is alive. Better yet, it’s top of mind for so many Arizonans. But how do you know if you’re ready, or at least ready enough to clear some of the hurdles that come with getting into a place you can call your own? Here are three signs it might be time for you to become a homeowner.

1. You are financially prepared to purchase a home

It’s not always about the money… unless we’re talking about buying a home. Then, it’s kind of about the money. More than that, it’s about understanding your buying power, which is essentially how much home you can afford.

Also, does your buying power fit your needs, currently and in the long run? You might be newly married and ready to carve out a new life with your person in a two-bedroom place that fits all your stuff right now, but do you plan on having a couple kids? Are homes you’re looking at in a family-friendly area with schools you like? Most of all, can you afford a home that matches your future goals so you aren’t uprooted with a growing family?

Your savings are also important. One of the most effective ways to trim your monthly payment is to put more down up front. Of course, it’s easier said than done, especially in today’s climate, but even putting 20% down on a $500,000 house can save you approximately $600 every month. There are programs designed to help you get into a home with less savings, but the more you have saved, the easier it can be to get the ball rolling.

Your buying power and your savings also figure into the pre-approval process, which is where you find out just how much home you might qualify for. Once you know how much you can borrow, as well as how much you have saved, you can start the house-hunting journey!

2. Your life is stable or predictable

Spontaneity is important in every relationship. But when it comes to your home, you have to be ready to commit. And it starts with you. Do you currently have a steady, reliable income and a secure job? If you do have a secure job, are you comfortable with the commute your prospective house comes with, and are you okay with potentially doing it for the life of your loan?

Remember, this isn’t a one-year lease you might have signed with a rental. It’s a contract you sign, typically for somewhere between 15 and 30 years. Granted, you can get out of it by selling your home, but homes aren’t considered liquid assets, and selling them can be difficult depending on the market. When you buy a home, it’s important to make sure the purchase matches your lifestyle, your present circumstances, your future outlook and your overall timeline.

3. You’re ready to take on the responsibilities of homeownership

It’s not just the mortgage payment. When the A/C goes out, or the roof needs to be fixed, or you need a new washing machine, unfortunately, it’s on you. Be sure you’re ready to take on those challenges that come with owning your own home.

You’ll also have upfront costs tacked on to the sticker price of your home in the form of closing costs. Traditionally, that includes application fees, appraisal fees, inspection fees, insurance, property taxes and more. These are in addition to your down payment and monthly mortgage payment, so it’s important to either prepare for them or look for a program that can help you fund them.

That may also be something your lender can help with. Always talk with your mortgage loan officer about options that can help offset the extra costs that come with owning your own home. They may be able to help you access down payment assistance, closing cost credit and more.

Is it time to cross that threshold?

If you’re financially prepared to own a home, you have a stable lifestyle and you are ready for all the responsibilities that come with having your own place, you might be ready to buy a house. But everyone is different, and each person faces their own set of challenges and variables.

If you need some help answering these questions, it’s always a good idea to sit down with a mortgage loan officer and discuss your circumstances, your goals and everything in between. They work with homebuyers every day to help them find the right place, and they may have some experience and advice that can help.

In the meantime, check out our page and resources for first-time homebuyers. It’s a big, exciting step in the financial journey, and you can never be too prepared.