4 Major Ways to Know You're Ready to Own a Home

Saying that buying a home is a significant life change would be a massive understatement. It takes a lot of thought and planning before you can sign any paperwork or get the keys to a house. So, with such a monumental task ahead, how do you know if you will be ready?

Understanding and Accepting New Responsibilities

Before looking for your dream home and tallying up a budget, let's start with the basics: Are you ready to take on homeownership? There's a lot to consider when you own a house, and if you aren't aware of these factors or prepared to handle them, now may not be the time to buy a new home. You'll need to be ready to take on the annual costs for property taxes. Similarly, you'll want to protect your home, which means insurance: an additional annual or monthly fee. And, of course, you'll be paying off your mortgage, too. On top of all that, what happens if something breaks? You need to be prepared to invest the time, energy, and money in getting handy maintaining your property or pay for someone to do it for you. Then there are the grand ideas you may have for renovating your home, like installing a two-car garage or a pool. Are you prepared to research, fill out, and pay for the applications you need to make that happen?

Again, it's a lot. Thankfully, you don't have to do it alone if you look into the condo market, as strata can help shoulder some of these burdens. But you will have to consider strata fees and the rules and regulations you'll need to adhere to for living in those communities. Whatever you go, you will want to ensure you know what you're taking on before making this life-changing decision.

Money Isn't An Issue

With that broad outline of homeownership responsibilities, you likely notice many come with a cost. So, if you're looking to purchase a home, it's time to ask: How are your finances? Beyond the purchase price of a house, you need to be mindful of various other expenses if you want to feel secure instead of living with decades of debt and being considered house poor. You'll want to be sure your credit is solid, you have no or little debt, and you have a financial plan in place to pay for your house, whether it's securing the down payment solely on your own (at least 10% of the purchase price) or through a loan (which will come with interest.) If you can get all that in place, then you're looking good. But you'll also want to consider worst-case scenarios and have savings. A good rule of thumb is to have enough to cover your expenses for 3-6 months in the event of an emergency. And do you know about closing costs? Remember that when they give you the keys, you'll need to set aside money for legal and lender fees, home inspection costs, and other surprise expenses.

So, with all that said, how's your job situation? When you commit to owning a home, you'll want to commit to a stable income. That means sticking with the same job for a few years or at least carefully considering your options if you plan to change your career, too. You don't want your finances in flux when taking on the great expense of owning a home.

The Perfect Place for You

If you accept the financial and other sundry responsibilities, one final way to ensure you're ready to own a home is to know you want to settle down. You love the city, town, or county and the community; you've even spotted a few ideal homes in which you can see yourself. When you've found that perfect fit, make sure you plan to be there for at least 5 years. Anything less will make the whole ordeal more difficult. Because the longer you stay there, the more likely your purchase will appreciate, helping you build equity. 

That also means checking in on your relationship status. Are you involved with someone? How stable is it, and are you planning to buy with them? Alternatively, are you single, loving it, and looking to keep it that way for a few years? When you start involving someone else in your homeownership plans, that also takes careful consideration as it could lead to a lifetime of legal entanglement. But if all is well — money, relationship, the feeling is right — then it sounds like you may be ready to own a house.

Under Pressure

While all the above conditions should be your primary considerations, there's one other thing you may want to factor into your decision-making. Are you committing under pressure? Rushing into homeownership is never a wise decision. You don't want to buy a house just because everyone else in your social network is settling down or because your partner wants to "keep up with the Joneses," as they say. Because buying a house and moving is stressful enough! Why add additional pressure and anxiety to it all? Take your time and do your due diligence with the process to find the right home and settle in on your terms, hopefully avoiding any rash decisions.

Tick All Your Boxes

If you've satisfied all your concerns about owning a home, then the only other thing to recommend is to do the research. Take your time to look through the listings in the area(s) that interest you. Additionally, check out the interest rates. Then you can make an informed decision and use some great online tools for calculating down payments, how much you'll need monthly to pay off your expenses, and more. Also, research your financing options, and see what help you can get. You can do it all without a loan or decide to take on that debt if it works best with your financial plans. Lastly, research your agents so you have a good idea of the person you'll be working closely with throughout this lengthy process.

It's no secret that buying a house isn't a cakewalk. But that doesn't mean you need to be scared of the process, either. Once you take a breath, step back, and consider all the factors that go into the event, you'll know whether or not you're ready for it. The good thing is houses, for the moment, aren't going anywhere, and the market is constantly changing. If now isn't the right time for you, it could be soon. All you need to do is be mindful and honest with yourself, and you'll be able to spare yourself from making a poor decision and getting off on the wrong foot as a homeowner.