Are You Truly Ready To Buy The Home You Look At?
Owning a home is an important priority for most people from around the world but the hard truth is that sometimes you are just not ready for this vital life step. You want to be sure that you buy a home only when you are truly ready for it. In many cases people just look at a specific property and they fall in love with it. Because of this they buy. This is not always the best possible decision. Because of this, make sure that you think about the following so that you can determine whether or not you are truly ready to make the purchase.
Are You Now Struggling With Finances?
When you now struggle to pay bills, home purchase is most likely going to make things worse. The down payment means you saved some money, a minimum of 10% in most cases. Private mortgage insurances may be necessary when down payments are under 20% so you can end up having to pay with most of the money that you saved, thus eliminating the emergency fund you had. The rule of thumb is that when you cannot save money for a good down payment, a huge possibility that buying a home is a not what should be considered.
Long Term Ownership
The current recommendation is to only buy a home if you plan to live in it for a minimum of 7 years. This is because there is a significant investment made and transaction costs are high. As the purchase is made you need to through a time and money consuming process to get the loan, close a sale and also move to the new property. All this can add thousands of dollars to home buying costs. There is a very good possibility you will need to wait for around 5 years to break even with everything so planning for 7 years makes a lot of sense.
Dealing With Monthly Ownership Expenses
When you decide you are in a good financial situation and you can make the long-term commitment, it is important to understand exactly what monthly added expenses are going to appear. The idea is to perfectly calculate monthly mortgage payments and add property taxes together with insurance costs. There are various mortgage calculators that can help with that but remember that sometimes the local taxes are higher. Be sure that you always calculate based on local statistics.
The last really important thing that you have to understand is that homeownership costs are not always just what you initially think. There can be some additional costs you have to take into account. Unseasoned buyers often do not know about this and end up in financial problems. For instance, homeowner association fees are often overlooked. This will sometimes add hundreds to monthly expenses.
The single family homeowner needs a good budget, together with time to calculate it. There are different routine maintenance costs that will appear and many bigger projects like a brand new roof or a paint job for a child’s room. Everything needs to be considered in order to make a very good buying decision and figure out whether or not you can actually afford the new home you want to buy.