Skip to content
Share:

How to Tell You're Ready to Buy a House

By: NerdWallet

Published: March 21, 2019

How to Tell You're Ready to Buy a House

Making the decision to become a homeowner is emotionally and financially complex. Here are some key things to ask yourself if you’re considering whether buying is right for you.

Do you have a good reason to buy?

Sometimes switching from renting to buying is a no-brainer.  Maybe you live in a modern one-bedroom apartment in a chic part of town, but you have a baby on the way. If you want a place in a good school district, with more square footage and a yard, buying may well be your best bet.

Other times, the urge to buy is driven by emotion: You see a house you like and you “just know.” There’s nothing wrong with that reaction, but take time to check out the property before you make any commitments. If it’s too far from work, near a noisy road or the best house on a bad block, it may not be as good a deal as it first appears.

And remember: Houses go on the market all the time, and there are tens of millions of single-family homes and condos in the U.S. So there’s no need to worry if your first choice doesn’t work out; your home is out there.

Can you make the upfront investment?

Buying a home requires an initial investment that you can’t ignore.

First, many lenders require a down payment of 20% of the home price. That’s $40,000 for a home that costs $200,000, about the median price in America. You’ll also owe closing costs, which could include loan-origination fees, discount points, appraisal fees, survey fees, underwriting fees, title search fees, and title insurance. Those could total another few thousand dollars.

The expenses don’t end there. You’ll want to hire an independent inspector to look for defects in a home before you buy.  This will cost several hundred dollars, but could save you thousands in repairs. And then there are moving costs, state or city taxes, utilities installation and the costs of changes you might want to make to the home — such as new flooring or painting — that are easiest to do while it’s empty.

This isn’t meant to scare you off; buying a home is still a smart choice for many people, despite the costs. But it does take a lot of cash.

Can you afford the upkeep?

Your mortgage payment might be fixed for the next 30 years, but your property taxes and insurance rates can rise. And if you didn’t make a 20% down payment, you’ll have to buy private mortgage insurance, or PMI, until you have 20% equity in your home. It costs about $165 per month on a $200,000 loan.

Once you’re a homeowner, you’ll also have to pay certain utility bills that might have been included in your rent. And you’ll be responsible for maintenance: double-pane windows one year, a new garage door the next, fixes to the roof five years up the road. It adds up.

These numbers are based on averages.  Plug your specific figures into a rent-or-buy calculator to find out if you’re ready for homeownership. And know that there is no one answer that’s right for everybody. Whether you keep renting or buy, your decision should be right for you alone.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

04. May 2016 
Categories: Just For You - Exclusive ArticlesMortgages

View all posts

Members' Voice Testimonials

This credit union is the best, I love the customer service and you can't beat the interest rates. I'm happy to be a member of this great credit union.

The branch manager introduced herself and was extremely helpful. She stated that if there is anything we ever need to please let her know. Very positive experience!

Greta was absolutely amazing - as always. She makes me and my parents feel valued and supported. We are forever grateful. [The Credit Union] has been hugely supportive over many years. And we feel known and cared for.

Long as I have been with the credit union, I haven't had any problems. I also like the protection on my account.

My overall experience at the credit union was exceptional. The staff was hospitable offering water, my service was timely and professional and the office was well lit and clean.

As a member for more than 40 years, i have always had great service from the USSFCU and know that they stand behind their great reputation.

A top rate Credit Union, [I'm] privileged to be part of! Thank you for all you do for our family! USSFCU Credit Union was able to resolve our financial situation - vehicle, personal loans, customer service/recommendations, within 6 months. We belonged to another credit union for over 20 years, with results not even close to comparison. We switched ...

Your people and products are amazing. The recent [online banking] overhaul is phenomenal. [I've] been electronic banking since Tele action phone banking - paying bills with my push button landline decades ago. USSFCU is light years ahead of everyone else in terms of ease of use and client experience!

I have been a member for more than 30 years. I no longer reside in the DC area but continue to bank with USSFCU because of the ease and the customer service.

I have been a member for over 50 years, and I have always gotten good service with loans, when I had to have service at a branch, and when I needed to have money sent to me from my savings account. The personnel have always been friendly and treated me with respect.

I especially appreciate being able to quickly speak with someone (not a robot) and that person has always been knowledgeable and helpful.

Excellent customer service streamlined and transparent process. The representatives are efficient, knowledgeable, and understanding of the type of loans offered by Credit Union.

The USSFCU behaves as a credit union ought to behave. The staff works with and for the members, not for a corporate board. Interest rates for a car loan, a home improvement loan, and a mortgage are low and terms are transparent.

Staff are courteous and friendly to work with. Very knowledgeable about services and products offered or available. Excellent follow-up with customers.

I have appreciated USSFCU services for many years since I left my work on Capitol Hill. I have appreciated the occasional webinars on purchasing a home or retirement planning.

I have been a member since 2006, and have always appreciated the customer service response to any concern or query. In addition, as I have traveled extensively, USSFCU has provided support and access.

I've had a credit union account for decades, even though I no longer work on Capitol Hill. I now have two accounts. I've been able to do all of our banking remotely, by app or by phone.

I have been a USSFCU member for almost 20 years. There is nowhere else I want my money to be. I always receive excellent service.

I deeply appreciate the stellar service, the proficiency, the professionalism, and the kindness. I am truly honored and grateful to bank with a financial institution that treats customers like family.

Read More testimonials.