3 Important Considerations If You're Thinking of Buying a House
Buying a house is such an important milestone in one's adult life...but how do you know when it's the right time?
My husband and I lived in an apartment for our first two years of marriage. We loved the location and the overall charm of our rustic apartment, but when we started to run out of space and wanted to grow our family, buying a house seemed like the next natural step. However, speaking from experience, making the leap to home ownership can be terrifying and confusing. If you jump too soon, you could set yourself up for buyer's regret and disaster.
Especially with this past year being so volatile and difficult, how can you tell if you are really ready to take the leap? If you're considering home ownership in the next year, I've put together three questions I would recommend asking yourself before you take that next exciting step.
1. Can you afford to buy a house right now?
As a planner and a worrier, this was the first question I was concerned with when we started thinking about buying a home. It is so important to make sure you are at a place financially to make such a big investment. For us, we were in comfortable, stable jobs when we made the leap. We also started to realize that spending more on rent was actually a detriment because we weren't building any equity.
Once you know you have the financial means to pursue home buying, it is so important to know what you can actually afford. According to My Home by Freddie Mac, you should plan on spending no more than 28% of your monthly gross income on housing. Once you figure out this number, start doing some research in your area. What is the typical cost of a home in your area?
After your preliminary research, you can start to do some more number crunching. Take the average home price and figure out the estimated monthly payment by putting in your figures in a Simple Mortgage Calculator.
If you've already spotted a dream home you love, you can also use this calculator to see what the minimum income you would need to make to afford it would be. Number crunching can be scary and daunting, but it is so important to look at the cold, hard facts. All of these tools, though, make it easier than ever to figure out if you can actually afford to buy that house of your dreams.
2. Are you ready for the responsibility?
Owning a home comes with its own additional responsibilities. If you are used to renting, you may be used to picking up the phone to call a landlord to deal with any repairs or maintenance. Once you own a home, it's all on you.
A month after we bought our home, for example, our $800 water heater broke. That was an expense we hadn't budgeted for, and it really taught us very early on that homeowning is expensive. It is important that after you buy your house, you still have money in reserves for extra expenses. You can check out some average costs of House Maintenance Projects just to help you get an idea of how much you should have set back for surprise expenses.
Don't forget, too, that there is a time commitment that comes with these maintenance jobs. If your job requires many hours or a lot of travel, you may want to add this into the equation when deciding if it is the right time to buy a home.
3. Do you have the time to commit?
The home buying process can be intense. From scanning potential properties to the actual process of buying, you need time to be able to do it right. Be certain that if you are going to take the leap into homeowning, you are ready to put time into the process. This is a big step, and you want to make sure you don't cut corners.
Be sure to research the home buying process from start to finish so you know what to expect. For example, I didn't realize that my lender would require paystubs and financial information for the previous year. It took me some time to get those documents together.
All in all, buying a home can be scary. However, taking the leap can also lead to a rewarding, fulfilling life. I am so glad we bought our home when we did because it has helped us build the life we have always dreamed of.
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