When it comes to real estate, people tend to have lots of questions and it is really important that you find an experienced agent like Blake Rubin who is willing to take the time to answer your questions fully before making any big real estate decisions. One of the most common questions that people, especially young people, have is about whether they should be renting or instead thinking about buying their first house. Of course, everyone’s circumstances are different and there is no right answer to this question, but there are some things that you should consider to help you decide.
Are you confident about your job?
Before you decide to buy, you need to be relatively sure that you have a reliable source of income and thus will be able to not only afford to purchase a home but also that you will continue to be able to afford it a few years down the line. Of course there are never guarantees on this front, but if you have concerns that your job may not be secure, either because you industry or company is struggling, or perhaps that you might want to change jobs in the future, then it may be better to rent.
Do you have savings?
Despite the availability of financing which requires only a small down payment, you will certainly get better mortgage terms with a larger down payment. The old rule of thumb was to aim for a 20% payment, and while this amount may be impractical given the prices of homes in many cities, you should aim to come as close as possible. You also need to have savings to cover some of the costs associated with purchasing your home that you may not have figured in – in addition to the transaction costs of purchasing a home, you may need new furniture, upgraded appliances, or other repairs sooner than you might expect. And don’t forget that home ownership comes with many expenses that as a renter you may not have paid previously – utilities, property taxes, insurance, condo fees, and more.
Are you planning to stay for 5 years or more?
Circumstances change, but in general you should be planning to stay in a home for at least 5 years before you buy. There are a number of upfront costs associated with purchasing a home, and there will also be penalties for closing out a mortgage ahead of time. Generally, it takes about 5 years to recoup these costs so that you can at least break-even if you sell.
Are you ready to be a homeowner?
Owning your home as opposed to renting it brings not only new financial responsibilities but also requires you to adopt the mindset of a homeowner. As a renter, you were able to count on the fact that someone else was responsible for maintaining the property, repairing the roof, fixing appliances or burst pipes, removing snow, and for all of the many things that come with home ownership. If you prefer not to have to take on those responsibilities and costs, you may be better off renting.
There are many other things to consider as you evaluate your readiness to buy a home. Be sure that you take your time, do your research, and ask lots of questions before deciding if you are ready to buy.