Are you beginning to wonder if you should continue renting or if you should finally take the plunge into homeownership? It’s a tough decision. And the truth is that there is not a really straightforward answer.
But you can ask yourself a few questions before making the big decision.
So, let’s end this internal debate once and for all. Here are the top 5 questions you should ask yourself and evaluate before diving headfirst into homeownership:
1. Why do you want to buy?
Are you doing it because people expect you to buy a home? Are you doing it to please others? Is this the obvious ‘next step’? Or does it actually fit your financial plan in the long-term? Does it seem like a good investment for you?
Essentially, it comes down to finances. What are your short-term versus your long-term goals? Sit down and carefully map these out. You want to make a smart financial decision. If the investment makes sense and it fits in with your short and long-term goals, it may be time to make that plunge!
2. Do you want homeownership to be part of your lifestyle?
The financial aspects may match up, but does it suit your personal lifestyle goals? Assess all factors equally. They’ll matter when it comes to your happiness down the road.
3. Do you have a steady job and is your income predictable and reliable?
If you aren’t sure if you’ll still have your job in 5 years, it’s probably a good idea not to buy. Make sure the financial security is there before you commit to buying.
4. Do you have the money saved and a budget for your down payment and mortgage payments?
This comes back to your financial situation. Make sure to assess where you are with all your current accounts carefully. Do you have savings that can cover the down payment? What about the monthly mortgage payments? What about monthly bills and utilities? Did you make room in your budget for new furniture or appliances for your new home?
5. Currently, what are you paying for rent? How does this compare to your mortgage payments?
If your mortgage and monthly bill payments equate to a similar amount to your rent and other monthly bill payments, it may prove to be a worthwhile investment. Again, map out your finances. Compare and assess your current situation versus the cost of homeownership.
You may also want to take into consideration the pros and cons:
What are the advantages of renting?
With renting, you may save more every month after all monthly payments are made.
Rent is flexible. If you want to buy, you want to commit to at least 5 years in the same house.
On-time rental payments build credit.
Your landlord takes care of all repair costs and problems.
What are the advantages of homeownership?
You get tax deductions. You can deduct mortgage interest and property taxes.
You get to decorate and make the space yours.
You decide on maintenance and upkeep costs or efficiency.
You build equity and may cash out later on your investment (depending on the market, location, and other factors).
Weigh the pros and cons that relate to you and your life. Answer the questions above, and determine if you’re ready! Becoming a homeowner is an exciting time. But you absolutely want to make sure you’re 100% ready before committing to probably the biggest investment you’ll ever make. Take your time. And then, make the best decision you can that suits you, your lifestyle, your budgets, and your needs.
This blog was provided by Chandler Crouch of the Chandler Crouch Realtors team.