Six Questions to Decide Whether You're Financially Ready to Buy a Hous

You may feel ready to purchase a house, but are you financially prepared? Here are six questions to help you decide if you are ready to take on the responsibility of home ownership.

1. Are you ready to take responsibility for all maintenance?

The biggest difference in home ownership and renting a living space is the maintenance. You will not be able to call landlord if the toilet does not work and you cannot unclog it. The small expenses add up over time. Make sure that you have enough to handle this.

2. Can you pay the insurance that you will need to be a responsible homeowner?

The mortgage payment is hardly the only monthly expense that you will have. If you do not put enough money down up front, then you will have the more interest payments to worry about. There are also protection insurance payments such as flood or earthquake insurance depending on your geographic location.

3. Will you fit in with your neighbors?

The cost of a home is only one aspect of home ownership. When you decide on a home purchase, you are really deciding on an entire neighborhood. If you are going to be uncomfortable in the neighborhood that is within your budget, you may need to save more to increase your choices.

4. Are you on the edge of your budget when your mortgage payment is finished?

If you are like most new homeowners, then you are using the free online mortgage calculators in order to determine if you are financially ready. There is nothing wrong with this. However, if you are on the edge of your budget after the mortgage gets paid every month, you will not have a very comfortable tenure in your home. You need at least six months of savings as well as a separate kitty for unexpected maintenance.

5. Are there HOA fees?

You need to determine if there are home ownership association fees that are associated with your real estate purchase. Depending on the type of neighborhood you're moving in, the neighborhood may require you to pay fees for the upkeep of shared resources.

6. Do you have enough money to put furniture in the home?

Unless you are buying a completely furnished house, you will need to put things in it. If you do not have enough money to get furniture for every room in the house, then you may want to wait a bit.

As you can see, there are many more expenses outside of the mortgage payment when it comes to home ownership. Be ready to take on all of the expenses before you commit to a home purchase.

Information credited to ReaLocation, real estate agents in Toronto.