If buying a home isn’t the biggest purchase you’ve ever had, then it’s the most memorable. With this in mind, you must make sure you are prepared for this significant financial step before taking it. How do you know if you’re ready? Here are a few signs that now might be your time to buy.

1. Having A Stable Income

A stable income is the most important factor when preparing to buy a home. While it can be tricky to determine how secure your job is, you should be pretty confident that your income will be stable for the next few years, at least.

Being able to demonstrate a pattern of financial stability over the past two years or more if you’re hoping to obtain a loan. Lenders are likely to ask for pay stubs or tax returns before granting a loan on your behalf. If you are self-employed, it can be more challenging to obtain a loan, but never impossible. If you are self-employed, documentation is proof to your lender that you have financial stability.

2. Long-Term Planning

Buying a home is undoubtedly a long-term investment. The average American owns a home for 13 years, and the tenure is going up. Planning on staying in the same house for several years is a big commitment. Before you do, ask yourself some of these questions. Will you need to relocate for work? Will you need extra space for raising a family? Can this provide a safe haven for when you get older? 

These are essential questions to ask yourself when considering homeownership. It may be time to buy now if you can see yourself living in the same home for the next five years or more.

3. Good On Payments

If you have no trouble paying your rent and utilities on time each month, that’s a sign that you are more than capable of paying your mortgage. You probably even set aside a monthly budget plan which is responsible and shows signs that you’re more than prepared for surprises. Something first-time buyers aren’t aware of, homeowner fees. So when you start budgeting, make sure to factor in homeowner’s insurance, state and local taxes, HOA fees, and regular maintenance fees.

4. Know What You’re Looking For

Homes are as unique as the people who live in them. So it’s important to know what you’re looking for before you begin house-shopping. Consider how many bedrooms you’ll need, how far you’re willing to commute, what school district you’d like to live in, and what type of neighborhood you want yourself in. 

Once you know what you want, find out if it’s available. Depending on the market, you may find many or no properties listed that meet your criteria. Keep an open mind. For example, if the number of rooms is not to your liking, but the location is everything you wanted, there may be some room to compromise. Compromising might not get you everything you wanted on your list, but it’s good enough for now as a first-time buyer. 

5. Affording A Down Payment

The good news here is that a down payment may not be as large as you think. Many people believe that a 20% down payment is needed to buy a house, but in reality, the average down payment in 2020 was only 6%. Of course, 6% of the cost of a home is still likely in the tens of thousands, which can be daunting. However, the more you can put down, the better. It helps in building up equity for your new home. 

Closing costs are also something to put money aside for when putting a down payment. They can cost around $10k after paying for the title insurance, home inspections, appraisal, credit reports, taxes, and other fees. It’s a lot, but it’s important to remember that buyer closing costs are relevant to getting the mortgage approved. It’s part of the process that all buyers go through. 

6. Good Credit

Before buying a house, check your credit. Though a score over 580 is acceptable, the higher, the better. A score over 700 is excellent. Your score affects your ability to get a loan, your down payment, and your monthly mortgage. Suppose your credit score isn’t entirely where you’d like it to be, take time from buying a home until you’re able to build it up. Give yourself some time to make the entire home buying process manageable and stress-free. 

Determine whether now is the right time for you to buy. If you can say “yes” to the items on this list, you may be ready to start shopping now! While many factors can affect your readiness to purchase a home, evaluate your financials and life stage as a whole.