Buying a home requires you understand your current finances and station in life before you commit to becoming a homeowner.
When determining whether you're ready to purchase a house, there are financial considerations, such as how much debt you have and whether you have saved enough for the necessary down payment. However, certain factors are related to your current life goals.
Here are some more questions to ponder when deciding if you're ready to buy a home:
Do I want to stay in one place?
Unlike renting an apartment, condo or house, homeownership doesn't come with the immediate decision to stay or move each year when a lease is up. Sure, you can sell your home at any time, but doing so doesn't guarantee you'll be able to net a profit that can cover what you owe on the mortgage.
The consensus is that homebuyers should be prepared to stay put for five years before they decide to close on a house. This is why people usually wait to purchase a home until they're starting a family and settling in one place. If your career, academic or other goals don't permit you to be grounded for too long, homeownership may be something to look forward to in a few years.
In addition to examining your aspirations, consider whether you enjoy any city long enough to stay for a while. You may be ready for the hustle and bustle of Chicago or New York now, but will you be as fond of the high population density in five, 10 or 15 years?
Are you tired of living under a landlord's rules?
One of the biggest issues of living in a rental property is that you can't make any alterations to the property without getting permission from the landlord. Plus, you're typically required to return the unit to its original state before you move out. If you want a burgundy accent wall to compliment your new sofa, for example, you'll have to wait until you're a homeowner.
If you're ready to customize your space without limits, buying a home is the way to go. You can paint and put as many nails in the wall as you want. Just make sure you remember that you'll be responsible for any repairs if your hammer slips and you punch a hole in the drywall. Also, if there's a homeowners association, you may still run into some rules about what you can do to the outside of your house.
For more information about smart ways to manage your finances, contact Landmark Bank.
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