Home ownership is not for everyone. Some prefer the flexibility of being able to move to a new city or country every few years. Others are more focused on big projects in their career or education to devote the proper time to buying a home. Some simply don’t have the resources. Whatever your situation, it’s important to know the right reasons to purchase a home.
Emotional Readiness
Owning a home is a big responsibility. There are both financial and time costs associated with the ownership and the upkeep of a house. If putting in the time and money is something that you can make central to your life, then you might be ready. There can also be outside, societal pressure to buy a home, as many see home ownership as a universal stepping stone. Make sure you are buying a home for you, and that home-ownership will fit your life and life goals.
Financial Readiness
Financial readiness isn’t just whether you have enough for a down payment or not. Just because you may qualify for a mortgage, it doesn’t mean you should borrow money for one. Before you begin looking to pre-qualify, make a budget for yourself. Calculate the true costs of home-ownership. Look where you stand with debt-to-income ratio.
Perhaps you need to pay down some credit card debt before considering applying for a mortgage, maybe you’re expecting a child, or looking to go back to school; all of these can be valid reasons to wait to purchase a home.
Read: How Much Home Can I Afford to Buy?
Security and Stability
If your debt is low, work life is stable, and you plan on staying in the same location for the next five years, you should be looking to purchase a home. At a certain point, the monthly rent check is money that could be better spent on building equity. If the money you spend on rent seems like it’s getting thrown away, deep down, you may be thinking of buying a home. If you already own a home, but that new promotion has started to make you feel like home maintenance is a waste, you also may be ready.
Read: 5 More Considerations When Buying a Home
The decision to purchase a home is one of the biggest choices in anyone’s life. For most, a home will be the most expensive thing they ever own. In the past, home ownership was seen as a natural progression in the course of someone’s life. But today, many people happily rent for years on end, and never find an appropriate time to make the jump to home-ownership. So how do you know if you are ready to make that leap?
Read: The Pros and Cons of Renting vs. Buying
Although there may be a perfect home waiting for you in your desired area, the unfortunate reality is that many home buyers have to make compromises during their home search process. To be prepared, understand that there may not be the perfect house in the perfect location at the perfect price and in the perfect condition you require. Although this doesn’t mean that you won’t find a house you can afford in your perfect location, be prepared to be flexible on:
If you know what your priorities are, then finding your ideal place to call home is both possible and realistic!
If location is your #1 priority, yet buying in that location will price you out of several of your other priorities, then you might have to compromise in several ways:
Every home-buyer faces the same tug-of-war. Home price, size, location, commute, amenities, and many other considerations all grapple for attention. Although all features seemingly have equal importance, many could be subjectively classified as ‘nice-to-have’ over ‘must-haves.’ Often something or somebody has to make a difficult choice, but ultimately ideal compromises can lead to a perfect (or almost perfect) home choice.
Read: How to Pick the Perfect Neighborhood to Buy a House
You can’t compromise on having good, qualified professionals on your home-buying team. Attempts to cut corners or compromise on this part of the home buying process will only lead to pain further down the road. Do your due-diligence in selecting these people for your team, and make sure they always have your best interests in mind.
Read: How to Build Your Home Buying Team
In the home purchase process, the sale price of the house itself is only part of the cost of buying. Besides the down payment, there are always closing costs in any home sale. Closing Cost is a singular term for a wide variety of fees and payments, paid out to a wide variety of people involved in the sale, upon which the sale depends for going through.
This is not a complete list of all closing costs, but a list of the most common ones. The different fees involved to close a home sale can vary widely from state to state.
Fees to the Lender
Fees to Others
Read: How to Buy a Home with Bad Credit
