It always seems like the nicest properties on offer is the ones for sale, not rent. Or you might be thinking that you need more space, so maybe it’s time to become a homeowner. Perhaps purchasing a house is just something that lots of friends in your age bracket are doing. But is buying a home the right thing to do?
Attack the issue and answer some important questions for yourself, and you should immediately recognize whether this is the right time to become a homeowner or not.
Why do You want to Buy a House?
This might seem like a question with a really obvious answer, but is it? By thinking about your reasons for wanting to buy a house you can be sure of both your long-term and short-term motives.
Are you looking to make a good investment? Is it likely to be cheaper than renting? Do you want a family home for the future? The answers to these questions will help you understand the kind of house you’ll look to buy and how much to spend on it.
If you aren’t convinced by your own answers, then it probably isn’t quite the right time to take the plunge and purchase. On the other hand, if now is indeed the ideal time to invest in a property of your own, you’ll be even more convinced of this after you answer your own questions.
What is a Reasonable Budget?
There is no denying the fact that we would all love to buy a fabulous house offering an incredible level of luxury. However, for most of us, it is vital that we understand our own budgetary restrictions right from the start.
Buying a house that is too expensive for you to support is one of the worst mistakes you could make. Equally, you might have long-term regrets if you buy a place that isn’t representative of what you could have afforded to pay.
The first step is to work out how much you can afford to borrow, and whether repaying this loan on a monthly basis is likely to be something that you can comfortably do.
Overextending yourself financially when you buy a house is a big mistake that could cause you all sorts of problems in the future. This is why you want to take the time to carefully consider your ideal budget before making any commitment.
What Property will Suit You in a few Years’ Time?
It is one thing to find the ideal house to buy for your current needs but quite another to find one that will still be right in a few years. You certainly don’t want to risk landing a property that you will soon grow out of.
Are you likely to get married soon or start a family? Might your career take you to a different location? Will the house soon feel too small or cramped, or might it end up being too far from where you need to go each day?
By thinking a little bit into the future, you can see what kind of property will still suit you in the medium term.
Is it Time to Settle down in one Place?
Is now the right time for you to commit to spending the next few years in one location? If not, then it probably isn’t a good time to buy a house.
You really need to spend at least 5 years in a newly purchased house to make the purchase worthwhile. Otherwise, the costs of buying and then selling the property could turn it into a bad decision overall. On the other hand, if you spend at least 5 years there, hopefully, the value will have risen sufficiently to compensate for the turnover costs.
Your instincts should tell you whether it is the perfect moment to settle down or whether you still need to do some living and identify your long-term plans before buying a place.
Where do You want to Live?
An obvious question that not everyone remembers to ask themselves is the one of exactly where they want to live. Staying in the same neighborhood where you now reside might be perfect, but there may also be great opportunities to move elsewhere.
Would an area closer to your workplace be better or do you want a quieter, family-oriented place to live now? Making a few scouting trips out to the different areas of interest to you will help you make a good decision.
You could also try doing some online research and speaking to people who live in the areas you’re considering.
Are You Ready to Buy?
If you are thinking of buying a house right now, you really need to be sure that the rest of your finances are in order. This is a fabulous chance to check your financial situation and sort out anything that isn’t quite right.
If you have never really had a handle on your income and expenses up to now, this is a good time to get one. Simply setting up a spreadsheet and recording your monthly comings and goings is a great start.
Have You Considered all of the Costs?
Buying property entails a huge expense, but it doesn’t all come down to the purchase price. You’ll also need to consider utility bills, insurance, property taxes, maintenance and other related costs.
Living on your own property is a fabulous feeling, but you don’t want to end up struggling to pay the bills each month. Try working out the overall costs of property ownership before you buy. If it seems too steep a cost then maybe you need to save some more or wait till your salary increases before going any further down the path of becoming a homeowner.
Source: The New SavvyPrev. Article