The dream of buying real estate is one that many people share. While owning real estate is widely considered to be part of the American dream, purchasing it at the wrong time in your life can quickly turn your dream into a financially stressful nightmare. If you are feeling the urge to purchase your first home or any other parcel of real estate but are unsure about whether you are really ready for the challenge, this basic checklist can help you make the right decision for your situation. 

Do you have a secure job or steady source of income? 

Home ownership comes with substantial, ongoing costs, even after the mortgage is paid off. Annually, homeowners must pay for real estate taxes, home insurance, and home maintenance and repairs, while monthly costs include heating and cooling, utilities and services, and the mortgage and interest payment.

Before you consider buying real estate, take time to make sure that you feel your employment is secure and be sure that you have steady income sufficient to cover all the costs of owning a home.

Have you saved for a down payment and closing costs? 

Purchasing a home without having cash set aside to cover the down payment and closing cost can leave homebuyers in a difficult financial situation. While it is possible to find a few loan options that require little or nothing down, doing so means it will take longer to build any equity. Having no equity can leave homeowners in a precarious financial position, should they need to sell the home or property within the first few years of ownership.

Can you qualify for a mortgage with good terms?

Being able to qualify for a home loan with a low interest rate and excellent terms is critical for first-time buyers. If the only loan you can qualify for has high interest or intimidating terms, you probably should not proceed with a purchase at this time. 

How long do you feel you will live in the area? 

Another factor to consider when trying to decide whether to move forward with a real estate purchase or continue to wait depends on how long you plan to live in the area. If your long-term plans point to moving within five years, you may find yourself upside-down on the loan and unable to sell at that time.

To learn more about buying a first home or another parcel of real estate, interested buyers should consider meeting with a reputable, caring real estate professional who specializes in working with first-time buyers. These professionals can help you determine when to buy a home and help you see what areas you may need to improve in before doing so.