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6 Signs You’re Ready to Buy Your First Home – The Motley Fool

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Buying a home is a big decision, so don’t rush into it if you …….

Image source: Getty Images

Buying a home is a big decision, so don’t rush into it if you aren’t ready. 

Key points

  • Buying a home is a major financial commitment that could last for decades.
  • You don’t want to buy a house before you are certain you’re financially prepared.
  • There are some signs you’re in a good position to buy, including having a fully-funded emergency fund.

Buying a first home is something many people look forward to. It’s really exciting to own a property of your own and get to put your own stamp on it. 

But buying a home is a financial choice as well as a decision about your lifestyle. And it’s a big decision. You need to make sure you are completely ready for it, both when it comes to the money side and when it comes to the realities of what homeownership means.

So how can you tell if you’re ready to become a property owner? Just watch for these six signs. 

1. You don’t plan to move soon

A home is not a very liquid investment and you probably don’t want to buy one just to turn around and try to sell it quickly. 

Not only can it be challenging to find a buyer, but there are a lot of potential downsides to short-term ownership. For example, if you own your home only a short time, property values may not go up enough before you sell to cover transaction costs. You may also pay capital gains tax if you make a profit on your home if you sell it within less than two years. 

That’s why you should make sure you’re pretty settled and don’t plan to sell right away before you even consider a home purchase. 

2. Your income is pretty stable

A stable income is another key indicator you’re ready to buy a home. Having steady, reliable income makes it easier for you to qualify for a mortgage loan. It also reduces the chances you’ll have trouble making mortgage payments as a result of a future job loss or income cut. You don’t want to buy a home only to be unable to pay for it and face foreclosure. 

3. You have reasonable credit

Getting a good rate on a mortgage …….


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