If you’re trying to decide if you’re ready to buy a home, there’s probably a lot on your mind. You’re thinking about your finances, today’s mortgage rates and home prices, the limited supply of homes for sale, and more. And you’re juggling how all of those things will impact the choice you’ll make.

While housing market conditions are a factor in your decision, your situation and finances also matter. As an article from NerdWallet says:

“Housing market trends give important context. But whether this is a good time to buy a house also depends on your financial situation, life goals and readiness to become a homeowner.”

Instead of trying to time the market, focus on what you can control. Here are a few questions that can clarify whether you’re ready to make your move.

1. Do You Have a Stable Job?

One thing to consider is how stable you feel your employment is. Buying a home is a big purchase, and you’ll sign a home loan stating you’ll pay that loan back. That’s a big commitment. Knowing you have a reliable job and a steady stream of income can help ease your mind when making such a large purchase.

2. Have You Figured Out What You Can Afford?

If you have reliable paychecks coming in, the next thing to figure out is what you can afford. That’ll depend on your spending habits, debt, and more. To be sure you have a good idea of what to expect from a number’s perspective, start by talking to a trusted lender.

They’ll be able to tell you about the pre-approval process and what you’re qualified to borrow, current mortgage rates and your approximate monthly payment, closing costs to anticipate, and other expenses you’ll want to budget for. That way, you can make an informed decision about whether you’re ready to buy.

3. Do You Have an Emergency Fund?

Another key factor is whether you’ll have enough cash left over in an emergency. While that’s not fun to think about, it’s an important thing to consider. You don’t want to overextend on the house and then be unable to weather a storm if one comes along. As CNET says:

“You’ll want to have a financial cushion that can cover several months of living expenses, including mortgage payments, in case of unforeseen circumstances, such as job loss or medical emergencies.”

4. How Long Do You Plan To Live There?

It was mentioned above, but buying a home involves some upfront expenses. And while you’ll get that money back (and more) as you gain equity, that process takes time. You may not recoup your investment if you plan to move too soon. For example, if you’re looking to sell and move again in a year, buying might not make sense now. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains:

“Five years is a good, comfortable mark. If the price of your home appreciates considerably, then even three years would be fine.”

So, think about your future. If you plan to transfer to a new city with the upcoming promotion you’re working toward or anticipate your loved ones will need you to move closer to take care of them, that’s something to factor in.

5. Above all else, the most important question is: do you have a team of real estate professionals in place?

If not, finding a trusted local agent and a lender is a good first step. The pros can talk you through your options and help you decide if you’re ready to take the plunge or have a few more things to get in order first.

Bottom Line

If you want to discuss everything you need to consider to determine if you’re ready to buy, let’s connect with KM Realty Group LLC.