Do you dream of a future with a yard and a white picket fence? One where you're not writing away 30% of your salary to your landlord every month? Being able to buy a home is a big part of what we're sold as "The American Dream," but it's not for everyone.
Renting an apartment forever is absolutely an option, and a damn good one. But still, many people every year decide to give up the rental life for home ownership (32 percent of home sales were to first-time buyers in 2016). Wondering if you should be one of them? Here are nine signs you're ready.
This isn't a checklist, and these things certainly aren't requirements for your first foray into real estate. But if you can say "yes" to more than a few items on the list, it's a good indicator that buying might be a solid next step for you.
1. You're out of debt.
2. You have an emergency fund saved up.
3. You have a down payment saved up.
The minimum for an FHA loan is 3.5% of the purchase price. More than 5% will get you into a fixed-rate conventional loan (where you pay private mortgage insurance monthly). And if you can manage 20%, you're in the very best shape to avoid fees altogether.
4. You have good credit.
5. You own a basic set of tools and know how to make small repairs.
6. Your current apartment doesn't fit your needs.
Here are some ways to know.
7. Buying is a better deal for you where you live.
The New York Times has a great tool on weighing your buying vs. renting options.
8. You love your city, and know you'll stay there for at least 5 years.
Selling a home is sometimes just as costly as buying one.
9. You want this home for the life you have now.
Don't feel like you have to buy a home for some hypothetical future time when you get married and have 2.5 kids.
Re-edited from a post originally published 6.1.2016 - TW