In certain situations, renting an apartment really is the smartest choice. However, most people do eventually move on from renting and become homeowners. Owning a home is usually a better financial choice in the long-term, and it gives you more freedom. It's nice to be able to make changes to your home after having to live in a property owned by someone else for so long! So, are you ready to wave renting goodbye and become a homeowner? Here are some signs that you are:
1. You have a down payment saved.
While it is typical for people to buy a home with a mortgage, most lenders do require that you pay for a certain percentage of the home's cost out of pocket. This is called the down payment. You may have heard that you need to save 20% of the home's cost as a down payment, but this is not typically the case anymore. Most lenders require a 10% down payment at most. There are programs through the Federal Housing Administration, or FHA, that will allow you to buy a home with a 3.5% down payment, although it is usually smart to save more than this so your mortgage payments are lower. In any event, you're not ready to buy until you have a down payment saved.
2. You don't plan on moving in the next 5 years.
You don't have to commit to living in the same town for the rest of your life before buying a home. However, you don't want to sell in less than 5 years, as doing so usually results in financial loss. You're ready to buy when you're pretty confident you won't be moving for at least 5 years. For most people, this ties into job stability. You want to know your job is stable for the next five years before you buy a house.
3. You have the time to take on more responsibility.
Do you have time to mow the lawn every week? Are you ready to add exterior maintenance tasks like power washing the driveway and weeding the garden beds to your routine? Owning a home is a lot more responsibility than renting, so you really want to ensure you have the time and motivation to take on these extra responsibilities before you start house hunting.
Think about the information above as you consider whether now is the best time to start shopping for a home. If you do decide you are ready to buy a house, reach out to a local real estate agent.