Perhaps you find yourself shying away from 'For Sale' signs in favor of 'For Rent.' After all, buying a home is a big responsibility. At the same time, it is a practical decision worth making given the right conditions. How to tell when it's time to buy vs. rent a home?
Here are eight signs to help you decide whether to switch from renting a home to buying one.
8 Signs It's Time to Buy a Home Rather Than Rent One
Finances play a big role in the decision to buy a home as Jennifer Orner shared in Lending Expert Tips On Credit Reports & How To Qualify For A Mortgage. For that reason, you'll notice that many of the signs associated with being ready to buy vs. rent have to do with money and how your expenses relate to your income.
1. Student loans are under control. Either you've been able to entirely or significantly pay them down or, if you’re eligible for deferment or forbearance, you have already applied and had them classified as such.
2. Credit card debt doesn't rule your paycheck. As with student loans, you want to avoid having a mountain of credit card debt to deal with on an ongoing basis. Aim not to exceeds 30% of your credit card limits.
3. Your credit history is looking good! It is essential to have a track record of paying credit cards consistently and regularly; you do not exceed 30% of your credit card limits. You've paid off any judgments or tax liens, and car loans are in good standing.
4. You love your work and it loves you! You have completed your education and found a job and a career you love, offering you growth potential. You can count on many years of steady paychecks with a sound organization.
5. You are self-employed and have developed a strong source of ongoing projects and income with clients who love you. You have a track record showing regular and consistent income over several years.
6. You've found the perfect community to become a part of. As fun as it is to live in the hippest section of town, you are ready for less noise, more space, and the opportunity to be part of a neighborhood. You are also tired of finding a new place to live in every year.
7. You have enough cash in the bank for a down payment. Ideally, you'll want to have a substantial down payment and additional reserve money available. Lenders will work with you to help determine the necessary down payment for your loan type and the ideal range of monthly payments you'll be comfortable living with
8. You're more than ready to take care of your own property and stop dealing with a landlord!
Check out our infographic on Should I Rent Or Should I Buy? for additional perspective.
What's your take on buying vs. renting a home? Are you in the middle of that decision? What else are you considering to determine if you're ready to buy a home?