Debating whether you’re ready to jump from renting to owning? It’s a big decision and one that shouldn’t be taken lightly. Your first home is arguably the biggest investment you will make in your life, so taking the time to carefully decide what is right for you is crucial. Here we’ve put together 5 indications to help you decide if you’re truly ready to make the transition from renting to owning.
You Can Qualify
If you’ve done the research and have the right amount saved for a down payment, then you may be ready to make the move. Just remember that you still need to qualify, and if you have less than a 20 percent down payment, you will need to include the necessary mortgage insurance premium which is added to your mortgage and included into your monthly payments. Plus, lenders want to see a healthy debt to mortgage ratio and credit score before they qualify you for a mortgage. Being prepared for the extra costs and qualifying requirements can make or break your decision.
You Can Afford The Mortgage Payments
Your mortgage will be much more than just monthly payments – it also includes your CMHC mortgage insurance that can also add up each month. Property taxes and heating costs are also used to determine affordability. Before you make the switch, talk to a professional mortgage advisor who can help you decide if you’re financially ready to take on a mortgage payment over a rental payment. You want to not only qualify but be comfortable with your monthly budget.
You Have Enough For Extra Homeowner Costs
Once you’re a homeowner, you’ll also have to pay a few more expenses each year – like property taxes. Additionally, you will also need to have some money put aside to pay for any repairs that may arise unexpectedly. If you don’t have enough saved to cover all the above, including your mortgage and down payment, you may want to wait a little longer until you have a larger cash flow.
You’re Ready For Maintenance And Repair Duties
Unless you’re moving into a condo or townhouse that includes the maintenance, you’ll need to take care of all the repairs on your own. So before you buy a home, make sure you’re ready to take on necessary tasks like painting, cleaning the gutters, yard work, preserving the façade, changing furnace filters, and fixing leaks, among other common maintenance items.
Debt Doesn’t Control Your Life
A mortgage is debt, and if you haven’t yet gained control of the debt you already have, both can become an extreme burden. But if you don’t have any high-interest debt and you have a reasonable monthly budget to pay down your existing debt at reasonable rates, you may be ready to make the jump from renting to owning.
Owning a home is an exciting process, but it also comes with a lot of responsibility and costs. Talking to a professional mortgage advisor can help you get a clearer perception of whether you’re ready to make the leap or not. At the Mortgage Advisors, we can help you decide what the best option is for you. Contact us today!