For some, home ownership seems to be a natural part of life. After all, many individuals don’t want to rent forever and when the market is right, there are a lot of individuals that jump at the opportunity to make a purchase.
But, how are you supposed to know when it’s the right time to make a purchase versus when it feels right to make a purchase?
Luckily, there are 5 questions you can consider and, depending on the answers, use to guide your decision as to whether home ownership is the right decision for you.
- Do my finances support my decision to purchase a home?
No matter how badly you want to be a homeowner, you simply can’t decide to make such a significant purchase if your finances aren’t in order. Of course, feeling financially secure will be different for different people, but you should have enough money for a 10% down payment as well as for mortgage insurance depending upon the amount of your down payment.
If you haven’t saved for a down payment, it’s unlikely that you’re ready to purchase a home. But if you have, you can answer “yes” to this question and continue considering the following questions.
- Will I be in this area for awhile?
In the past, staying put for just three to five years was enough to purchase a home. But nowadays, you should want to stay put for at least seven years to consider home ownership.
Primarily, this is because there are a lot of associated costs with purchasing a home including closing on the sale and moving, among others. And, when it comes time to sell your home, you’ll lose even more money.
So, if you aren’t willing to settle down or can’t count on settling down depending on your job and unique situation, it’s probably best not to buy.
- What are the standard costs of ownership?
What will you be spending, and how does this break down on a month-by-month basis? The simplest way to determine the standard costs is to calculate your home price minus your down payment into a mortgage calculator.
You can even plug in costs like property taxes and homeowners insurance to get a more accurate picture.
- What hidden expenses are there in homeownership?
While most homeowners understand the standard costs they can expect, few understand that there are many hidden expenses as well.
Hidden expenses include everything from homeowner association fees, routine maintenance costs, and significant expenses like a new roof or a new paint job. You can’t plan for all of these costs, so having a comfortable savings account is necessary to ensure that should something arise, you can handle it.
- What’s going on in the market in my area?
Even if you’ve answered “yes” or “I’m prepared” to all of the questions above, there’s one more you have to consider: what’s actually happening in the market where you live?
Home prices in some cities are skyrocketing at the moment whereas others are remaining more stable. Meanwhile, those who are renting may experience an increase in their income but in all likelihood, their rent is increasing as well.
Consider the market in your area and by doing so, you can better determine whether or not a home is the right investment at this time.
If You’re Ready to Purchase a Home, United Real Estate Can Help
If you’ve read through this article and are convinced that now is the right time for you to buy a home, the team at United Real Estate can help.
As a national leader in the real estate industry, we have the experience and expertise to assist with all of your needs. Contact us to purchase your dream home, today!