Here are 14 signs that it\u2019s time for you.<\/p>\n The better your credit score<\/a>, the better deal you\u2019ll get on your mortgage loan and the easier it\u2019ll be to get approved. Lenders view a good to great credit score as a sign that you\u2019re likely to repay your debts. They\u2019ll give you a better rate because they\u2019re less worried about default.<\/p>\n To get ready to buy a house, work on improving your credit score<\/a>. If you\u2019ve already got a good score, you probably have the financial management skills to handle owning a home.<\/p>\n A down payment represents a lot of money in every market. In some markets, it\u2019s prohibitive to reach 20%, which is why many programs exist that help you get in a home for much less than 20% down<\/a>. If you\u2019ve saved up 5% of the average home price where you live, it\u2019s a sign you might be ready to buy.<\/p>\n However, don\u2019t forget that the bigger your down payment<\/a>, the more you\u2019ll save over the lifetime of your mortgage loan. Putting down $5,000 or $10,000 more could get you into a bigger house. Take a quick look at the market and, if you don\u2019t like what you see in your price range, think about waiting and continuing to save.<\/p>\n You\u2019ll have to put more money into your house than the down payment. Don\u2019t forget about closing costs, maintenance, and emergency funds!<\/p>\n Closing costs<\/a> such as legal fees, lender fees, or taxes, can be up to 5% of the total loan. During the home inspection<\/a>, you might have found a few home maintenance items<\/a> you\u2019ll need to take care of sooner rather than later. And you should always have some emergency funds set aside for when the hot water heater breaks on Christmas Eve.<\/p>\n If your savings accounts will have tumbleweeds blowing through it after you\u2019ve paid the down payment, wait a few months or a year until you have a bigger cushion.<\/p>\n Paying down debt doesn\u2019t just improve your credit score; it also frees up cash to cover a mortgage payment and home maintenance<\/a>. If you\u2019ve been working on reducing your credit card or student loan balances, it might be time to buy.<\/p>\n Do you have to pay off everything to buy a house? No! Lenders don\u2019t expect you to be completely debt-free when you apply for a mortgage, so if you\u2019re still paying off a student loan or car, it won\u2019t disqualify you from borrowing. But in many cases, the lower your debt load, the better the loan terms you\u2019ll get or the more house you\u2019ll qualify to buy.<\/p>\n If you\u2019re going to move within two or three years, it may not make sense to buy. In Austin\u2019s area, \u201cpeople come for corporate jobs, and may move in two years.\u201d If you\u2019re not planning on staying in an area for three to five years<\/a>, you might not break even on your home sale. Worse, you could lose money, bringing money to the table so you can sell.<\/p>\n And don\u2019t forget about capital gains taxes<\/a> if you make a profit when you sell! The rate of capital gains taxes will vary based on how long you have owned the home. If you sell after only owning the home for less than two years, you could end up paying more in taxes than if you held on to it longer.<\/p>\n It\u2019s difficult to say how much more you\u2019d pay for the short term gains \u2014 it depends on whether you\u2019re married or single, and your income bracket before the sale \u2014 but it adds up to between a 3% to 20% difference<\/a> in terms of what you\u2019ll pay in taxes versus the rates for longer-term profit.<\/p>\n Capital gains \u2014 so the gain on your sale of the loss \u2014 aren\u2019t taxed at the same rate as ordinary income. If you made more than $250,000 for a single person or $500,000 for a married couple filing jointly, you\u2019d have to pay taxes on the excess profit.<\/p>\n If you\u2019re worried about losing your job next month, it\u2019s not time to buy a house. Part of planning to stay put for a few years is knowing that you have job or career stability.<\/p>\n It\u2019s important to look at both your current position and your overall career trajectory in the metro area where you\u2019re thinking of buying. Even if you have a great job now, if your industry isn\u2019t strong in that city, or there aren\u2019t many jobs available, continued advancement in your career may require that you relocate<\/a> at some point, and that\u2019s something you\u2019ll have to consider before signing up for a 30-year mortgage.<\/p>\n Owning a home means not just paying a mortgage, insurance, and taxes \u2014 you\u2019ll also need to be aware of maintenance and take care of a big investment! Are you ready for the responsibility of arranging for lawn mowing when you go on vacation? Prepared to cancel plans if your dishwasher overflows?<\/p>\n Owning a home is a large responsibility. If you prefer a more carefree lifestyle right now, don\u2019t tie yourself down.<\/p>\n While macroeconomic factors like unemployment rates and mortgage rates<\/a> impact the housing market, local markets can vary significantly from overall conditions. If years of a hot housing market has priced you out of buying in your city, but lately it\u2019s been cooling, now\u2019s your chance!<\/p>\n To get a feel for local conditions, talk to an experienced agent in your area. Whenever possible, you want to enter the housing market when factors are working in your favor<\/a>.<\/p>\n They\u2019ve been historically low for a pretty long time, but it\u2019s always nice to take advantage of saving money when you can! Not only would one or two points off your mortgage loan rate<\/a> save you a lot of money in the long run, but rates can also impact affordability.<\/p>\n According to Austin, low rates mean that, \u201cwhat someone can afford now, they might not be able to afford in a year or two when interest rates go up.\u201d<\/p>\n Maybe you\u2019re ready to settle down because you have a dog, you and your partner need more space when you\u2019re both working from home, your kids want a backyard, or you\u2019re just plain ready \u2014 whatever the reason, owning a house would be easier in many ways than renting for your lifestyle.<\/p>\n By contrast, if your relationship is on the rocks \u2026maybe it\u2019s not the best time to buy. It\u2019s not as easy to move out of a house you own together as it is an apartment you\u2019re renting jointly.<\/p>\n It\u2019s a lot harder to sell a house than it is to break a lease, but the trade-off is really worth it for some people. When you buy a house, you can\u2019t just pick up and move for a new job or relationship. Any major life change could take months to a year.<\/p>\n You\u2019re also tying up a large chunk of change, which could mean missing out on other opportunities. For example, if a family member offers you the chance to invest in their successful business, you could have to pass. Or if you had your eye on a new car or camper \u2026 those plans might have to wait.<\/p>\n After a few months sheltering in place in an apartment, homeownership might look pretty good to you right now! Sick and tired of listening to your neighbor\u2019s music? Want more space or privacy? These are important factors in buying a house.<\/p>\n Homeownership requires more responsibility, but you\u2019ll receive more privacy and control. One note of caution, though.<\/p>\n If you want to express yourself with your home \u2014 bright fuschia front door? \u2014 be careful about buying a house in a neighborhood with an HOA<\/a>. The HOA\u2019s rules could dictate paint colors, prevent you from planting large privacy shrubs to block your view of the neighbor\u2019s yard, or place other restrictions around your homeownership.<\/p>\n If you\u2019re thinking about buying to have more privacy and control over your home, avoid buying in a neighborhood with an HOA<\/a>, or at least ensure the HOA\u2019s rules are ones you can follow. (There can be real consequences to breaking them<\/a>!)<\/p>\n Kids in school and it\u2019s September? Maybe not time to buy a house now. Kids out of school in May and you have a chance to get them into a better school district? Great time to buy!<\/p>\n By contrast, if you aren\u2019t hampered by lifestyle issues throughout the year, then you could time your home purchase to when you are likely to get a good deal. An agent can help you figure out when timing the market could yield better results.<\/p>\n Owning a house comes with its own hassles, but renting has issues, too<\/a>. If you\u2019ve grown tired of unresponsive landlords, poorly-maintained units, or constant rent increases, it might be time to give your landlord your notice. Paying rent doesn\u2019t usually build wealth for your future, but owning a home builds equity<\/a>; some financial advisors consider it a sort of forced savings plan because you\u2019ll get some of that money back whenever you sell..<\/p>\n![\"Credit](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/10\/when-does-it-make-sense-to-buy-a-house-credit-666x381.png\")
<\/a>You have decent to good (to awesome) credit<\/h2>\n
You have a healthy savings account \u2026<\/h2>\n
\u2026 Like, really robustly healthy<\/h2>\n
You\u2019ve been paying down your debts<\/h2>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/10\/when-does-it-make-sense-to-buy-a-house-metro-666x381.png\")
<\/a>You know you want to live in the metro (or neighborhood) for several years or longer<\/h2>\n
You have decent job and career stability<\/h2>\n
You\u2019re ready to take on more responsibility<\/h2>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/10\/when-does-it-make-sense-to-buy-a-house-buyer-666x381.png\")
<\/a>Your local market is looking buyer-friendly<\/h2>\n
Mortgage rates are low<\/h2>\n
Your lifestyle supports it<\/h2>\n
You don\u2019t mind sacrificing some flexibility for stability<\/h2>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/10\/when-does-it-make-sense-to-buy-a-house-door-666x381.png\")
<\/a>You want more privacy and control over your living space<\/h2>\n
The timing isn\u2019t too disruptive<\/h2>\n
![\"Money](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/10\/when-does-it-make-sense-to-buy-a-house-change-666x381.png\")
<\/a>You\u2019re tired of paying rent, and it\u2019s only getting more expensive<\/h2>\n