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One of the biggest financial decisions which you can make during your lifetime is the one to step onto the property ladder and get a mortgage. However, this is not a decision that you want to enter into lightly. After all, you don’t want to rush into anything too quickly and risk stretching your finances too thin.
Of course, the financial market is better than it was a few years ago, and companies and banks are more willing to provide financial support. But if you are looking for some personal signs that you are ready for a mortgage, here are a few of the main ones.
You Don’t Have Any More Debt
If you have been working hard at clearing your debt over the past few years, and you have finally managed to overcome this obstacle (or at least tackled it in a big way) you could be in a financially stable enough position to buy a house. The extra cash which is not going towards your credit cards, student loan etc can now be channeled towards your mortgage, property tax, insurance, home maintenance, and the other costs directly associated with buying a home.
You Have a Steady Job
While every job comes along with a degree of uncertainty, some positions are steadier than others. If you have been in the company for a few years and you feel like an indispensable part of the team, this could be enough to give you the peace of mind that a mortgage isn’t too much of a giant leap for you. Also, if you have been receiving regular rises in your income, you could well feel like the time has come to stop renting and start putting it towards a place of your own.
You Have Savings and an Emergency Fund
There is always an element of the unexpected during life, but one of the best ways of dealing with this is with a solid savings account and emergency fund. If you have a few months worth of bills and living expenses set aside, this is useful in giving you the peace of mind that you have a Plan B to fall back on if anything goes wrong.
What If You’re Retired?
There are many advantages of retiring. One is that you have reached an age where you can apply for a reverse mortgage, if you want to. As a loan only available to people who are 62 or older, it is a mortgage type designed to cater directly to your needs. However, you cannot get it until a reverse-loans calculator for amortization is used to determine what you can borrow.
Amortization is simply the process of evaluating how much your home is worth. Federal rules regarding how much of that equity is open for borrowing are also taken into account by the reverse mortgage calculator tool. Another part of the process is deciding if you want the amount you can borrow all at once or doled out to you over time. Either way, you can wait years to repay any amount of it, which is one of the biggest advantages of a reverse mortgage over a traditional one.
Future Goal and Long-Term Living Plans
Buying a house is such as big investment that you don’t want to plan on moving over the next few years if you can avoid it. If you have the next five to 10 years mapped out and it involves staying in this area, this is a good sign that you are in a personal situation which suits getting a mortgage. However, if you are planning on buying a home with someone else, you need to ensure that your goals mirror each other’s. You don’t want to think that you are going down the same path, only to find that you are actually going down different ones.
These are just some of the most obvious and clear signs that you are ready to take the plunge and get a mortgage.