Are You “Mortgage-Ready”?

With home prices still hovering near record lows, realtors and mortgage brokers everywhere are urging consumers into homeownership. But are you really ready for the responsibilities that come with homes and mortgages? Consider some of the following factors before making the plunge.

How Stable is Your Income?

It should go without saying that you should be able to comfortably afford your monthly mortgage payment – and that you should expect to be able to do so in the future! In the early 2000s, too many people were burned by mortgage lenders who encouraged them to buy more home than they could afford. If your income varies wildly from year to year, or if you have reason to believe that you may be let go or downsized in the near future, it probably isn’t the right time for you to buy.

How Stable is Your Lifestyle?

Of course, when you buy a home, your mortgage won’t be the only expense involved in the process. In addition, you’ll be expected to pay closing costs to cover the various fees involved in writing the new deed title and legally transferring the property to you. These could add thousands of dollars to your home-buying costs, so it’s not something you’ll want to pay for if you plan to move within the next year or so. In fact, most experts recommend that you wait to buy until you’re sure you’ll be in the same place for 3-5 years, in order to allow the equity you build up in your home to negate these costs.

How Handy are You?

If there’s one universal truth when it comes to homeownership, it’s that something is going to break at some point. This doesn’t just apply to old farmhouses or “fixer-uppers” – even new homes can be plagued by the kind of shoddy workmanship that’ll have you ringing up the plumber, electrician or other repair specialist. And when it comes to these home repairs, you’ve either got to pay someone to do it or do it yourself. If you don’t have the handyman skills necessary to perform basic maintenance, you’d better have deep pockets to cover the expenses involved with home repair!

Despite how dismal this may all sound, be aware that there are plenty of advantages to being a homeowner as well. For example, when you pay your mortgage on time every month, you’re building equity in a physical asset – instead of just padding the pockets of your landlord. You’re also helping to build a solid credit history that will help you to qualify for additional loans and programs in the future. And, of course, there’s the satisfaction and security that comes from knowing you own your own home.

It is, however, important to be aware of the challenges that holding a mortgage can present. Owning a home is very rewarding, but it can be very stressful as well – especially if you’re unprepared for the challenges you’ll face. For this reason, it’s important to think through each of these considerations before taking the leap into homeownership.

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Are You “Mortgage-Ready”?

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