5 Indicators That Show You’re Ready for Home Ownership

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Buying a home is the biggest step mankind can make toward the American Dream, and you need to be sure you’re ready or you can end up with a financial disaster. Luckily, your life and bank account give you clear signs to guide your way. If your financial planning indicates you are ready for home ownership, then this could be the perfect time to buy.

5 You Want a Tax Break

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Spoiler alert: Buying a house can be great for your taxes. It’s pretty likely that a significant percentage of your monthly mortgage checks will go to interest. That interest? Tax deductible. Every year. That is, within Internal Revenue Service guidelines, of course. Expenses you incur to maintain your home could possibly be deductible as well. And the taxes you pay every year on your home end up being tax deductible, too. When you’re ready to move out, if you lived in your home for at least two years, you can make up to $250,000 in profit from selling your home at a higher price without having to pay taxes on that gain.

4 You Have Money Ready to Spend


To avoid the distressing extra costs of private mortgage insurance, you should have at least 20 percent of your loan amount in cold, hard cash. This proves to the world that you are a responsible human being who planned ahead and saved up for this enormous investment, so the banks of the world can trust you with their money. If you didn’t save up 20 percent, they don’t trust you, and the insurance you pay monthly protects them if you go belly up. If you have 20 percent earmarked for a house, then congratulations—you may be ready to buy.

3 You Have Job Security

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No income is ever guaranteed, but if you have good reason to believe you will still have your job for the next few years, then you are in a good place to buy a home. Preferably, you will have already had your solid, steady job for at least two consistent years. Unlike a rental, you can’t get going when the going gets tough; it can be hard to offload a home once your income stops. Even if your job is rock solid, it doesn’t hurt to have an emergency fund for up to a year to be prepared.

2 You Have (Really) Good Credit


If you’ve got a credit score in the 700s and up, now is the time to brag. Your credit score has a huge effect on how much interest you pay, and a low score will land you with an interest rate that may not be worth buying a house. Over the life of your mortgage, you can save tens of thousands of dollars or more by having a credit score in the mid-700s or higher. Another important aspect is the amount of debt you are carrying. Debt-free and good credit score? Pony up to the real estate bar—you’re ready for business.

1 You’re Not Going Anywhere

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If you mean to plant roots, like give-or-take-five-years roots, then buying a home could be a wise idea. Depending on your area, you could be saving money by buying instead of renting after two to eight years. Homes can sometimes be hard to get rid of, but if you have no intention of going anywhere for a few years, then you don’t need to worry about that. It might be time for the long-term investment of a home.

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