The decision to buy a house is a big one, which is why you should consider a lot of factors before doing so. Above all else, you first concern should be your commitment to an area. Do you see yourself moving anytime soon, do you have family or a job you’re committed to in your current city, would you like to start a family? Once you’ve decided you’re not going anywhere for the foreseeable future there are some other considerations to make. In this blog we will take you through some of those considerations, which should help you in this daunting process.
Do You Have Enough For A Down Payment?
The first on the list is a big one: Do you have enough for a 20% down payment? Many lenders require a 20% down payment to secure a mortgage. If you don’t have the money you can get a loan, but typically a PMI (Private Mortgage Insurance) will accompany that loan. While this is an option some are willing and able to take, it’s not an advisable financial move. The reason people aren’t able to afford houses is usually because they wouldn’t be able to pay the down payment, or the mortgage and PMI payments would be too much every month. Staying in your “price range” should be your first search filter.
Maintenance & Repairs
The main benefit of living in an apartment is typically the maintenance and repairs are handled for you. The landlord is responsible for keeping their building in a livable state, so the big things are taken care of. Owning a house means a lot more responsibilities in upkeep. Firstly, you may be able to afford a house, but it may also require a lot of repairs and renovations that you can’t afford. Installing new appliances, repainting, getting a new roof or floors, HVAC costs, etc. This includes initial costs, as well as the price every year to ensure your home doesn’t go into disrepair.
Budgeting Monthly Expenses
Buying a home can be a costly venture, but paying for all that goes with it must also be considered. Mortgage, taxes, insurance, Homeowners Association dues, all of these must be taken into account. Your mortgage will be your greatest cost, but while it may be cheaper than paying rent every month, it’s not your only expense.
At the end of the day, buying a home comes down to having the money to do so. However, there are many affordable homes, in which case buying would be cheaper than renting for the rest of your life. Make the right choice and buying a home could be one of the best financial decisions you could ever make.