Buying a home feeds into the fantasy of a perfect life. Everyone wants their own home, filled with people they love that they can eventually pass down when it’s time. Some people may have a couple of houses in the plans before they settle on that final one, while others seem to be unsure if they should buy at all. Taking on a mortgage and a Homeowners Association can be a nightmare for first time home buyers, so here are some questions to ask yourself to ensure you’re ready to step up from renting!
Do You Plan To Stay Longer Than Five Years?
If you’re unsure about your future, buying a home isn’t for you. People who have moved a lot within the last five years, or aren’t sure about whether they’ll want to skip town in a couple of years, would be better off renting. Selling a home can last from a month to a couple of years, depending on the market. You don’t want to get stuck somewhere just because you liked the idea of a place a couple of years ago.
How’s Your Credit Score?
Before you ask yourself, “Should I rent or buy a house?” you should check your credit score. If your credit score is below 750, you should keep renting and working to raise it. Although 640 is acceptable, it’s not quite enough to lower your interest on a mortgage. The higher the rate you get stuck paying, the more money you’re losing. Save face by avoiding this problem, and work to keep your credit trending upwards until it’s time.
Can You Handle Emergency Spending?
If someone threw a ball through the window in your living room, what would you do? If the pipes in your basement burst and flooded so severely that nothing was saved- where would you start fixing it? Having a landlord as a renter can be nice because someone else has to take over the dirty work of repairing everything. Being a homeowner puts you up for a lot of risks, and emergency spending comes up. Could you handle unexpected bills being thrown your way?
How Stable Is Your Job?
What type of job do you have? Most Millennials and Gen Z people have problems buying homes because they skip between jobs every two to three years. Although this can be a great way to keep things fresh and ensure you’re getting access to new opportunities- it doesn’t look acceptable to a bank. This error could end up raising your interest rate.
Are You Prepared for Property Taxes and HOA?
Your mortgage isn’t the only expense you’ll see in your home. With the national average sitting just under three thousand dollars, property taxes pop in at the beginning of every year. On top of that, homeowner association fees have to make an appearance every month. In some suburbs, the prices are just thirty to fifty dollars a month- in big cities, they can hit upwards of eight hundred dollars. This price is a significant cost, almost the price of renting a one-bedroom apartment, that many aren’t willing to put down.