So, you want to buy a house.
It’s common to envision an ideal image in your mind of finally purchasing your first home. No more rent to pay or awkward encounters with the landlord. Everything inside – whether it be the wall colors, the kitchen countertops or the cabinet styles – is now in your total control. Sounds pretty exciting, right?
It is! However, it’s still important to gather as much information as possible, seek out expert advice, and proceed caution. Start by asking yourself a few questions:
Is this the right time in your life, personally, to make this type of commitment? Can you afford a down payment and mortgage bills? Is the house in good enough shape? What’s the current status of the housing market?
The answers to these questions will help you determine if the time is right to finally pull the trigger and become a homeowner.
The current state of your finances is perhaps the most important factor in buying a house. Any house requires expenses, from an initial down payment to monthly mortgage, taxes, maintenance and repairs. A typical mortgage loan could take 20-30 years to pay back, while some of the other new costs – costs that your landlord typically covered – are now your responsibility. Some of them could include:
Household items (furniture, electronics, kitchen sets, etc.)
The State of the Housing Market
Fun fact: When purchasing a home, it’s important to analyze the real estate market before you make any commitments. Compare current prices to those of old, and attempt to identify any upward or downward pricing trends. It may be more practical to wait a year or two if pricing trends are trajecting downward. Case-Schiller can provide pricing indexes for your specific market.
Buying vs. Renting
Although the prospects of buying your own home are enticing, renting is usually the cheaper route. Create comprehensive budgets for both, and compare/contrast the two. Which side is more beneficial for your present situation? If you can afford it, purchasing a house may be a better long-term investment. Though, in the short-term, renting may be the more affordable, non-committable option.
Once your mind is made up, your focus will likely shift from the question of if you should buy it, to when you should buy it, which is exciting!
If you’re in need of more specific advice or ultimately come to a decision, don’t hesitate to give me a call to find the best option for you!