Tired of the nightmare that is moving house every two years and considering splurging on your own home? Well, here’s RoofAndFloor’s list of tell-tale signs that’ll help you figure out if you are ready to take the plunge:
You are monetarily secure
If your bank balance has been steady for a while, which means you have a stash that includes your emergency funds as well as enough cash to pay your average expenses for a year, then you have already covered the most important step.
You have spare funds for the down payment
While buying a house will be one of the most expensive things you’ll ever purchase in your life, once you take a loan, EMIs will make your ride rather smooth. However, it’s the down payment you need to be worried about. Take stock of the extra funds you have, besides the emergency savings and average annual expenses. The spare funds should ideally stand between 15 – 20% of your dream home’s worth.
You have a steady source of income
Having a source of income that pays on time, rewards you with bonuses and an annual appraisal will reduce your worries and help you pay your EMIs on time.
Your credit score is solid
A good credit score is a proof of your credit worthiness in the eyes of a lender.
If you have been cautious about paying your credit card bills on time and have handled the payments of any previous or current debts responsibly, then lenders will only be too happy to help you own your dream home.
You are free of significant debts
In order to avail a loan, your debt-to-income ratio should be under 50%. Not only is that going to give you a good credit score, it will prevent your home loan from looking like an extra burden in case you have multiple loans to pay.
You are ready to take responsibility
Becoming a house owner comes with its own set of commitments, including legal responsibilities and formalities as well as day-to-day repairs and maintenance. If you are mentally and physically prepared, then there’s no stopping you!
You have long-term plans
If you are comfortable with your life and can foresee a future in the area you are currently living in, then now is just the time to go house shopping.
You know your needs
If you crave freedom from the constant moving, have ascertained your needs and that of your family and are confident of these being fulfilled within your budget, right where you plan to reside, then go for the big splurge.
Your life is sorted on other fronts
Decisions regarding marriage and future family plans, especially if they include starting your own family could prove to be stressful, aside from being sources that could affect your current financial standing. Make sure you have basic clarity in these aspects.
You ‘feel’ ready
You evaluated your finances with the help of your Chartered Accountant, have an idea of the kind of home you like, and are well aware of your budget. That said, no one can tell you that you are ready, more than your own gut, so tune in. If it says so, then go for it!
