According to the National Association of REALTORS® Research Division, 48% of homebuyers in 2015 purchased a home because it was the right time and they were ready to buy a house. But how do you know when you’re ready to buy a home? Take our quiz to find out.
1. Have you researched the homebuying process?
A) Yes, I can tell you everything about buying a house, from getting pre-approved to having money saved up for hidden and after-tax costs
B) I’ve done a little research but still have some questions
C) Not really
2. What is your current financial situation?
A) Great, I plan to buy a house with cash
B) I have a job and savings
C) I live from paycheck to paycheck
3. Do you have a regular income?
A) Yes, I work full-time
B) I work part-time, but I have savings
C) Not right now
4. What is your credit score?
A) 700 and above
B) Between 620 and 699
C) Lower than 620
5. Do you have any debt?
A) I have minimal debt
B) Yes, but my debt-to-income ratio is less than 43%
C) Most of my income goes towards paying off my debt
6. Describe your expenses.
A) I manage my expenses easily
B) I’m able to pay my expenses, as well as save every month
C) More than half of my monthly income goes towards paying off credit cards
7. How much money do you have saved for a down payment?
A) I have more than 20% saved for a down payment for a home within my price range
B) I do not have 20% saved, but I’m confident that I’ll get pre-approved for a home loan
C) I don’t have any money saved for a down payment
8. How good are you at home maintenance?
A) I’m comfortable working around plumbing and electrical systems
B) Not great, but I do have money saved up for home maintenance expenses
C) I don’t do home maintenance
9. How long are you planning on living in the house?
A) At least 10 years
B) Not less than three
C) I’m thinking about moving in a year or so
10. Have you spoken to a real estate professional?
A) Yes, I’m pre-approved for a loan for a house in my price range
B) No, but I’ve looked into the real estate agents and lenders in my area
C) Not yet
How did you score?
Mostly A’s
You’re well-prepared and have everything in place to get the process started. Once you start searching for a home it’ll just be a matter of time before you close the deal.
Mostly B’s
It sounds like you’re going in the right direction and have a good idea of what the homebuying process entails. Here are some resources to help complete your preparations:
- How much home can I afford?
- Real estate terms that you need to know
- Things to have on your checklist when choosing a real estate agent
Mostly C’s
It sounds like you’re very early in the process but working your way towards owning your dream home. You’re in the right place. Start by figuring out what you can afford and calculating what your monthly housing payment (principal, interest, taxes and insurance) will be. Use this amount to determine how much money you’ll need to save up to get the best interest rate on your home loan, while aggressively paying down any debt and actively working to improve your credit score. Once your financial standing is strong, speak to a lender about getting pre-approved for a home loan and find a trusted agent to guide you through the rest of the process. Good luck!
