There are financial considerations, but also logistical and emotional things to think about. Schools, jobs, neighborhoods, and a whole lot more responsibility comes with taking the plunge to own your own home. Buying a home takes stamina, desire and commitment not only to navigate the complicated and time-consuming purchase process, but also to learn the ropes of being a responsible homeowner.
Maybe you've dreamed about buying. Or perhaps you've researched for-sale homes online, tried to calculate how much you can afford to spend or peeked inside a few open houses. But are you really ready, emotionally and financially, to step up your game and make your move?
There are many good reasons to own the roof over your head, but there are many tradeoffs as well. Here's how to decide if the time is right for you.
Here are five questions to ask before you make the leap into ownership
1) Is my financial house in order?
Discipline and the ability to save is the key principle. If you’re already struggling to pay your bills, buying a home will only compound your money woes.Ideally, you’ve saved at least 10% for a down payment – keep in mind you’ll have to pay private mortgage insurance if your down payment is less than 20% — and that’s in addition to saving for retirement and building an emergency fund.
2) Am I sticking around for a while?
The old rule of thumb was that buying made sense if you planned to stay put for at least three to five years. Some would recommend 7-year window nowadays given the historical rate of home price appreciation.
As important as the numbers, is whether you’re ready to tie yourself down to a particular home in a particular city. We also have to consider what we do for a living, job market in the area, nearby schools , neighborhood, etc
3) What is the after-tax cost of owning?
If you’re on solid financial ground and ready to make a longer-term commitment, the next step is to get a realistic estimate of what you can expect to spend, and how that breaks down monthly. You may want to use mortgage calculator for your reference.
4) And what are the hidden expenses?
There are many additional costs of homeownership that unseasoned buyers tend to overlook. Four out of five buyers of new homes, including condos and townhomes, can expect to pay homeowner association fees.
Most single-family home owners will need to budget – money and time – for routine maintenances costs, as well as big-ticket projects, such as paint jobs and new roofs.You have to be ready to take on all the things that come with ownership.
5) What’s happening in my market?
Economists may talk about real estate in national terms, but the market varies greatly from one city to the next, even from one neighborhood to the next. A good and reliable local agent can help you provide updated market value that will cater to your specific preferences.
There are several concerns that you have to consider before coming up with a life-changing decision such as buying a house. It is a risk to take but it requires the appropriate attitude to make it happen.Keep your objectives in mind and pick the right agent to educate and guide you.
Remember that the more you educate yourself about the process beforehand, the less stressful it will be, and the more likely you will be to get the house you want for a price you can afford - and with a smile on your face.