Okay, it's one of the biggest decisions of your life, so when do you know if you're ready to buy a home in Carmel Valley?

Homeownership readiness can come at any age … there are young twenty-somethings that took the plunge, and there are empty-nesters that buy after the kids are gone. The right time for you could be now, or anywhere in-between now and retirement.

Homeownership isn't just about affordability (although that's helpful). It's about responsibility. When you own your home, you are responsible for the mortgage, the taxes, the insurance, the repairs, maintenance and upgrades. If the toilet overflows, it's up to you do call the plumber or learn to fix it yourself. When the leaves fall … you get to rake them up. No more calling the landlord, property manager or maintenance staff. Just because you CAN buy a home is not the strongest indicator that you should.

Here are some things to think about before you jump in:

• Do you still have school debt? If you have debt from education loans, or personal loans and credit card debt from a misspent youth, you may need to work on getting your "financial house" in order before you take on a mortgage too. In fact, debt can be a symptom of not having enough available money. If you tie up all the rest of your cash into a mortgage payment and then your car breaks down … you'll be out of both your ride and your home.


• What does your credit score look like? If you don't already know, get your free credit report and make certain everything on there is correct. Then, get your credit score or sign up for a free monitoring service like CreditKarma or credit.com. Use their online tools to discover ways to improve your score. If your score increases month over month, you're probably on the right track.


• Have you saved up enough for a downpayment? An FHA loan on a $200,000 house requires just 3.5% or $7000, so it seems like a no-brainer, right? But in addition to that downpayment, you'll have closing costs, insurance, taxes and of course, you'll need money for new furniture, paint and a few other upgrades. Consider saving up at least double what's required for the home you want.


• Consider the monthly costs. Your payment is just the beginning … if you're moving from an apartment to a home, you'll have sewer, water and trash bills, taxes, homeowners insurance, association dues and a little money to set aside each month for future repairs. In fact, your little repairs kitty should equal at least as much as the deductible on your insurance. Don't fall into the trap of relying on online mortgage affordability calculators to determine if you can afford it.


• Do you plan to stay in this location for a while? If there is a chance that you'll be moving in a year or two, or even three or four, you might want to reconsider purchasing. You really need to be in your home for five or six years for its value to increase enough to cover those hefty closing costs you just dished out.

Well … are you ready?

If you've addressed each of these issues and know you have them covered, you may well be ready to buy. If you're ready—we can help! If you're close to ready, we can give you some pointers.

Give us a call and let one of our real estate professionals get your started.