Maybe your lease is up for renewal and your rent is going up — again. Or, perhaps you’ve saved up a good chunk of change for a potential down payment on a home. It could be that you’ve been touring homes online and some are piquing your interest enough that you’d like to request a showing.

Whatever the reasoning, you’ve got the homebuying itch and are starting to wonder: “Can I afford to buy a house right now?”

A number of factors layer into your decision to buy, and the question of whether you can afford to purchase a home right now goes beyond whether you have enough room in your budget to make those monthly mortgage payments (although that’s certainly important!)

As a general rule, you don’t want to spend more than 30% of your gross income on housing expenses. The guideline is one the government has been using for decades, with the rationale that if more than 30% of your gross income is going toward housing, you’ll be “cost-burdened.”

To help get some answers about whether you can afford to buy now, you can start with HomeLight’s personalized affordability calculator, which considers a number of factors, including how much you have saved for a down payment, your monthly debt, your credit score, and where you’re looking to buy.

Going a step further, meeting with a real estate agent can also help you take a pulse on whether you’re ready to buy, explains top Sarasota, Florida, real estate agent Toni Zarghami, who has 12 years’ experience. She can quickly link buyers to a lender to help crunch numbers and determine what your payments would be at different price points, as well as what current interest rates are looking like. Gathering that information will give you a better idea whether now is the right time to buy, she says.

“The first thing that we tell buyers if they are renting is, ‘Here’s the deal: you’re paying a mortgage,’” says Zarghami.

“So, if you want to start building your own equity, let’s have that conversation with a lender to see if it’s an option for you, because you are already paying a mortgage —  you’re just not paying your own mortgage.”

As you decide whether it’s time to make the leap from renter to homeowner, here are eight important questions to ask yourself.

‘How’s my job stability?’

Some careers have better future earning potential and job security than others. If you go with a fixed-rate mortgage, your mortgage payment will remain steady — but you may see increases in other housing costs such as property taxes, homeowner’s association dues, and homeowner’s insurance. Suffice it to say, you’ll want to be sure your wages can keep pace with these increased costs.

If you end up needing to sell your home because you need to relocate within a couple of years, you could risk taking a financial hit if your home hasn’t had enough time to appreciate in value. Same goes for losing your job or your company shutting down, or the company sliding into a recession.

The U.S. Bureau of Labor Statistics published data predicting industries that will experience the fastest growth in employment 2018 through 2028, and those that will most rapidly decline.

Here’s a look at the top 10 industries in the fastest-growing sector:

• Home healthcare services
• Outpatient care centers
• Individual family services
• Other information services
• Offices and other health practitioners
• Medical and diagnostic laboratories
• Computer systems design and related services
• Forestry
• Other ambulatory health care services
• Software publishers

Here’s a look at the top 10 industries in the rapidly declining sector:

• Tobacco manufacturing
• Federal electric utilities
• Apparel, leather and allied product manufacturing
• Communications equipment manufacturing
• Manufacturing and reproducing magnetic and optical media
• Newspaper, periodical, book, and directory publishers
• Wired telecommunications carriers
• Satellite, telecommunications resellers, and all other telecommunications
• Postal services
• Pulp, paper, and paperboard mills

Some questions to ask yourself:

• How stable is the economy?
• When is the next likely recession? As we saw in spring 2020, many people who had been ready to buy a house were suddenly unqualified again due to job loss, increased mortgage loan requirements, or both — effects of the stalled economy.
• How stable is my job? Have there been frequent layoffs, budget cuts or downsizing?
• What kind of safety net do I have, career-wise? What’s the employment rate in my county? Are there ample job opportunities in my industry?
• If you work for, say, a government contractor, how long are the contracts and will you need to move when the contract is up?

You might be able to buy now if…

You’re in a stable industry with stable companies (health care) or a stable career path with potentially unstable companies (technology), and there are plenty of other employers nearby. You’re often being recruited on LinkedIn or by recruiters in your area.

You might want to wait if…

You’re in a relatively unstable industry (restaurants, publishing, some manufacturing jobs) and there are not many other employers nearby. You’ve noticed a pattern of layoffs at your company, and jobs aren’t being replaced.

‘How long do I plan to live here?’

While it depends on the market, the average homeownership duration is 13 years, according to the National Association of Realtors. But, how long do you need to stay in a home before selling so that you break even or, hopefully, make some money on your investment?

In a steady market, homes will appreciate at a rate of 2% to 3% every year. As a buyer, you likely paid somewhere between 2% to 5% of the sales price in closing costs. So, you’ll probably want to hold on to your home for at least a couple of years to recoup the closing costs. Staying in the home for at least five years can often amount to a more sizable profit if you’re in a steady market.

You might be able to buy now if…

You plan to live in the area for at least a few years so that you can give your home ample time to appreciate in value.

You might want to wait if…

You have a job that transfers you frequently or you plan on moving within a couple of years. If you are set on buying instead of renting, but are confident you’ll move within a few years, you may want to talk to a lender about loans that work best for you, including an adjustable-rate mortgage, which offers low introductory rates.

By looking at the loan description, you can usually tell how long the rate will be fixed and when it will start to adjust. For example: a 5/1 ARM means the loan’s low introductory rate will be in place for five years, then is subject to adjusting on an annual basis.

‘What’s my credit score?’

Not only does your credit score determine whether you can qualify for a mortgage, but it also affects your interest rate. If you’ve got 10% to put into a down payment, a minimum credit score of 500 will qualify you for a Federal Housing Administration loan, which is a loan backed by the government and designed for homebuyers with low to moderate income. Once your score is 620 or higher, you can typically start qualifying for conventional loans. If your score is 740 or higher, you’ll qualify for the best possible interest rates on conventional loans.

Be aware that lenders will ask for higher credit scores or could impose mortgage overlays in riskier loan environments, such as when the economy suddenly stalls. Higher credit scores can protect you from last-minute changes by lenders.

You might be able to buy now if…

Your credit score is at least 500 and you have enough for a 10% down payment and want to go the FHA route. With less saved for a down payment, you’ll want at least a 620 credit score. The average credit score of first-time homebuyers is 684, according to member data analyzed by Credit Karma.

Note: Buyers will need higher credit scores during the current coronavirus pandemic.

You might want to wait if…

Your credit score is between 300 and 499. In this range, you won’t likely qualify for home loans. Also, if you are on the cusp of a 740 credit score, you may want to pay down the balance on a credit card so that it’s below 30% of your limit. This is a quick way to raise your credit score, and it could save you thousands of dollars in interest over the life of your loan.

‘What’s the market like?’

When evaluating the market conditions, you’ll want to weigh current interest rates as well as consider home prices in the metro area where you plan to buy. Locking in at a low interest rate will translate to lower monthly mortgage payments.

Worth considering: say you want to own a home and you see homeownership as an investment. But, you’re currently living in an area where there’s a major shortage of starter homes (hello, San Francisco and New York!), and home prices are simply out of your budget. Or, maybe you have a hunch you’ll be relocating with your job in the near future, and you don’t want to be tethered to your current market.

If your goal is to own a house, and it does not necessarily have to be owner-occupied, you can explore housing markets across the country that are a good fit for your budget as an investment property. If you find a market where rental vacancies are low, you’d likely be able to cover your mortgage by renting out the home and earning equity. Just be advised that loan products and rates are slightly different for investment properties.

You might be able to buy now if…

Interest rates are competitive and you’re looking at homes in a market where there are homes that match your budget. Or, if you want to purchase a home and rent it out and feel comfortable in the role of landlord.

You might want to wait if…

Interest rates are high and you’re in a market that’s especially strong for sellers, making it tough to find a home (any home!) that fits into your budget.

‘What are the HOA dues?’

Homeowners associations, or HOAs, are common in condos and townhomes, which commonly appeal to first-time buyers. Some single-family neighborhoods also have HOAs.

When you’re house-hunting, ask your real estate agent if the home is part of an HOA and, if so, how much the dues are and how often are they assessed. In general, the more amenities a neighborhood has, the higher the HOA fees will be. Fees can range from $100 to $3,000 a year.

You might be able to buy now if…

You factor the HOA dues into your budget and your existing debts and housing costs don’t exceed 43% of your gross income. Most lenders want you to have a debt-to-income (DTI) ratio of 43% or lower, so if you don’t have any debt at all (no credit cards, car loans, or student loans), you will be in even better shape to buy.

You might want to wait if…

The HOA dues would put too much pressure on your budget and would push your total DTI higher than 43%.

In addition to monthly dues, it’s common for HOAs to issue assessments for special projects, like paint jobs, tree removal, or pool renovations, which can be one-time payments that amount to hundreds or thousands of dollars. And if you get behind on your HOA dues, you risk having a lien placed on your property.

‘What are tax and insurance rates?’

How much you’ll pay in property taxes depends on where you live, and these costs can vary across the country. But, if you’re looking for a ballpark number, the average American pays $1,518 in property taxes each year.

To get an idea of how much property taxes will cost you, you should be able to find tax records at the city or county’s assessor’s office. Your property taxes are often paid through an escrow account bundled into your monthly mortgage payment.

In addition to property taxes, you’ll want to consider how much you’ll pay annually for homeowner’s insurance. Insurance rates also vary, but in 2018, the national average for home insurance was $1,083 annually.

You might be able to buy now if…

You factor in property taxes and insurance into your monthly payments, and your existing monthly expenses won’t push your DTI ratio higher than 43% in general.

You might want to wait if…

Property taxes and insurance are added expenses that will eat up too much of your budget, causing you to overextend yourself.

‘How much do I have in savings?’

Not everyone has the funds to make it happen, but if your savings allow for a 20% down payment on a home, then you’ll likely be able to avoid paying private mortgage insurance, or PMI, on a conventional loan. Typically, mortgage insurance costs between 0.5% and 1% of the mortgage loan amount on an annual basis. Still, you may qualify for loans with much less money down, with some government-backed loan options requiring no money down or as little as 3.5%.

Note: Your ability to get a mortgage loan with a low down payment will be compromised in risky loan environments, such as when there is a recession or a pandemic. When risk is higher, lenders will impose mortgage overlays on loans, requiring buyers to bring a bigger down payment to the table, or requiring a higher credit score to get a loan.

You might be able to buy now if…

You have enough money for a down payment, and still have money left over in your savings account to cover closing costs, moving costs, and have a fund for home maintenance costs.

You might want to wait if…

Your savings account will be wiped once you move into your new place. Would you have enough money to cover a maintenance hiccup, like your hot water heater going out?

‘What’s my debt?’