Renting Versus Buying
Some times when you are renting a property it can feel like you are spending money and never really getting ahead. You can feel as though it is time to move on and purchase a home of your own. There are major differences in renting versus buying and you need to make sure that you are prepared to deal with the differences in living in someone else’s property versus living in your own. Here are some of the questions you have to answer when deciding if you are ready to move on.
How Long Do You Plan To Live Here?
Are you someone who gets wanderlust or wants to find a new place to work or live? A home is a major commitment in how long you ill be invested in a community. Getting up a breaking a lease is difficult, but doable. When you are on the hook for a mortgage it can be incredibly difficult to move. You have to be committed to working and ensuring that you will be making around the same money now that you will be in the future. You need to be a part of the community for a long time. If you are content in your life, your job, and your community, it may be time to move on and purchase your own home.
How Much Do You Have Saved?
This is no security deposit and two months rent. Homes typically cost in the six figure range and require a down payment. This is typically anywhere from 3.5% to 20% of the total cost of the home. There may be grants and other government assistance programs to help you get your foot in the door, but a lot of the financial lifting will have to be done by you and your savings. Also keep in mind that the house down payment may exhaust your savings. If you don’t have a big savings account or will feel guilty in using that savings for a home rather than an experience, it may be best to pass on home ownership for now. If you have some money saved up but it isn’t enough for a home you want to buy, give it another year or so and continue to add to that savings until you’re ready for the real thing.
Is It The Right Time To Buy?
The housing market can be fickle! You don’t want to buy at the very top of the market, because once there is a correction you may end up having borrowed more money than your home is currently worth. Be aware if the homes in your community or nationwide are experiencing a spike in value or are sliding from a previous high. Like the stock market you want to buy low and sell high to protect your investments and to protect your home.
Are You Handy?
When you live in someone else’s property when the hot water heater breaks or the sink won’t stop dripping, you call the building super or the landlord directly and he or she will call a repairman or come and fix it himself or herself. You may have no real idea of just how much any of this vocational work costs in real life because it doesn’t affect you, but when you won the home you may be the one who has to fix it. If you aren’t handy, the repairman is coming to fix the property on your dime.
You are responsible for mowing the lawn, for paying all of the utilities and for each and every thing inside the home. Are you prepared for the added pressure of everything being in your name? From the repairs to the bills? If you are ready to step up, it’s your time to own a home. If you aren’t, give it another year and continue to save.
Is Your Credit Good Enough To Purchase A Home?
A mortgage is a loan to buy a home and the banks and creditors are going to need to have an idea of whether or not you are going to be good for the payments each and every month for the next fifteen to thirty years. So be sure to have your credit card payments in line and that you have ordered your yearly free credit report to clear off any debts you may have been unaware of or have been referred to a creditor because you have been delinquent in paying your debts. Get your fiscal house in order to insure you get the best rates available.