Are you ready to be a homeowner?
It is every person’s dream to have their own home. It is considered a milestone and a sign of independence and financial stability. More than that, for many of us, having our own home is a form of legacy, a culmination of a lifetime’s hard work that we’ll proudly pass on to our children in the future. Purchasing a house, condo unit, or any other type of real estate is also considered wealth creating, with the property seen as an investment especially when compared to renting.
You may be thinking about making the big move. However, even if you have been saving for a while and have enough to comfortably cover the down payment, there are still other factors that you have to consider. Which brings us to the question: you ready to buy a house? Take the quiz below to help you decide. You’ll also find a mortgage calculator to help you compute for the costs, but more of that here:
1. Is there room for a mortgage and other real estate expenses in your finances?
a.) Yes – 30% of my paycheck currently covers all my other essential expenses such as food, utilities, gas, car payment, tuition fee, and my monthly debt repayment.
b.) No – most of not all of my monthly pay goes to needs and wants.
c.) Maybe – my savings vary and sometimes gets depleted when there are financial emergencies.
d.) I don’t know – to be honest, I haven’t exactly done the math.
If your room was a room, how organized or cluttered is it? Does it have a lot of space, or is it full floor to ceiling with expenses and debt?
To if you are ready to purchase your own home, you must know if you are able to take on a monthly mortgage. Aside from the principal loan amount and interest, keep in mind that you also have to prepare for other expenses that come with owning a home such as real estate taxes, home insurance, and home association fees.
The formula for this is not that complicated: your monthly mortgage PLUS other real estate expenses should be not more than 25% to 30% of your net payment. This percentage will make sure that you have enough to cover your necessities and savings, and allow you to splurge a little.
Having your financial room in order is also a good indication that you will be able to handle your monthly mortgage. Take note that a mortgage is a long-term loan that can take anywhere from 10 to 20 years to pay.
2. Do you plan to move in the next few years?
a. No – I plan to be based in my new home for 5 years if not more.
b. Yes – I’m not yet content on where I am career or personal life-wise.
c. Maybe – It really depends on whether or not I get a great opportunity in another city or country.
d. I don’t know – I never thought of this as a factor until you mentioned it
Are you married or single? Do you have kids? If you do, are you satisfied with the education they are getting or are you more likely to look around for other schools? Lastly, are you with a company that you feel confident and happy enough to stay in for the long run?
Before purchasing a home, make sure that you won’t have or want to move addresses for at least 5 years. On average, real estate prices appreciate about 3% per year. This means that the longer you retain ownership of your home, the more valuable your property will be. On the other hand, if you resell your house to move out, you would lose more money in closing out fees than you would have gained in your house’s appreciation. Remember that a house is a long-term investment that requires long-term commitment.
3. How do you deal with a clogged sink?
a. With ease – I have something just for that stored in one of my bathroom cabinets.
b. I call the building superintendent, or my parents.
c. I call a plumber – and know which number to call.
d. I refrain from using the sink in the foreseeable future.
Perhaps more than buying a house, you should gauge if you are ready to own and maintain a home. As mentioned earlier, home ownership is a long-term commitment. This means that through the years, certain parts and places in your house will start to have leaks and creeks.
It takes both financial and psychological soundness to be able to handle a busted pipe or a broken washing machine. Make sure that you are ready to embrace both the conveniences and inconveniences that come with being king or queen of your castle.
Results: Are you ready to buy and own a home?
If you answered mostly As – You are most likely ready to purchase and own a home. You got your finances, career, and personal life all in order. All you need is a great home purchase and mortgage deal to get you started.
If you answered mostly Bs – It sounds like you are better off renting for now. We recommend giving yourself a few more years of getting ready financially and psychologically before seriously considering buying a home. Unlike conventional wisdom, there is also nothing wrong with renting for the most (if not all) of your life, if it suits your needs and lifestyle adequately. Besides, you are having too much fun and have too many moving pieces in your life right now that you surely won’t mind.
If you answered mostly Cs – You are on the right path to becoming a home owner. You just need your finances, career, and personal life to be fully stable before you commit to a mortgage. You wouldn’t want a financial shock to get in the way of your monthly payment.
If you answered mostly Ds – We think that home ownership is the farthest thing from your mind right now and you took this quiz out of curiosity. There’s nothing wrong with this. While buying a house is a great investment for your future, there is nothing worse than going ahead with it when you’re not yet ready, just for the sake of home ownership.
If you are ready to purchase your first home and looking for great financing, you can apply for a legitimate loan through Loansolutions, the country’s #1 loans marketplace. Shop for a loan from our network of legitimate lenders and banks for your down payment or mortgage. Our dedicated and expert loan agents will give you a call as soon as you apply to guide you through the whole loan process, from documents submission all the way to approval.