When will you know you are ready to buy a house? Check out our checklist to see how prepared you are:
# 1: I have a realistic budget
I calculated the expenses for buying a new home beyond the ticket price, such as all my closing costs, insurance, transportation costs, moving costs, apartment for rent in accra and annual home maintenance costs.
# 2: I saved a large down payment
I have saved at least 5% of the price of my new home as a down payment or I am aware of the loan costs with less than 20% down payment.
# 3: I have a reliable source of income and don’t expect lower income for the foreseeable future.
The income I have is enough to cover my mortgage payments, the costs associated with home ownership, and I will still have enough for my cost of living and long-term savings. I will be able to make those payments with an income if my partner is unexpectedly unemployed.
If you are still looking for a more reliable source of income, consider renting apartments.
# 4: I have an emergency savings fund that I won’t need to touch when I buy a house
My emergency fund is enough for me / us to survive for 3-6 months in case I unexpectedly run out of income.
# 5: My debts are manageable and under control.
My monthly payments to pay off my total debt, including my mortgage, are less than 38% of my gross monthly income.
# 6: I know where my credit score is and it’s in good shape
I’ve checked my credit rating and it’s been in good standing for at least 2 years before applying for a mortgage, so I know I’ll get the mortgage rate I deserve. # 7: I am capable and ready to make a long-term commitment.
I intend to stay in my new home for at least 3-5 years and realize that moving in sooner will likely make me lose money on my investment or have to pay heavy capital gains taxes on any gains I make.