There’s no denying that purchasing a home is a big commitment, regardless of if you already own a property or are searching for the first time. Homeownership comes with a lot of responsibility and stress, but it can also bring joy and monetary benefits if you buy when you’re emotionally and financially prepared.
If you’re considering buying a home, check out these factors to help determine if you’re really ready.
It’s Not a Rash Decision
Unless you’re incredibly wealthy and have cash to burn on impulse purchases, you should not buy a home if you haven’t carefully considered what it really means to own one. In addition to evaluating the financial costs involved, it’s important to take the time to consider how homeownership will affect your lifestyle. If you’re tired of sharing walls with loud neighbors in an apartment complex, it’s understandable that you would want more privacy in a stand-alone house. But if you get to the closing table before thinking about the maintenance and extra costs that come with a homeowner’s responsibilities, you might wish you would have put up with the noise for a few more years.
You’re in it for the Long Haul
Unforeseen life events that cause individuals and families to suddenly relocate, such as job transfers, often come up when they are least expected. But if no life-changing event occurs soon after you purchase a home, you should plan to stay there for at least 5 to 7 years. Short-term homeownership is not a wise financial move (unless it’s a quick flip situation) because the amount of money required to buy and sell a home within a few years rarely ever benefits the seller. Take into account your personal plans for the next few years when you’re thinking of homeownership. If you and your spouse are planning to have children, then a studio loft downtown likely won’t fit your needs in the near future. Unfortunately some life events that cause a quick move are unavoidable. However, it’s important to buy a home when you can commit to the location and the features within the home for an extended period of time.
Your Savings is Cushioned
Homeownership is expensive. In addition to the recommended 20% down payment you need to be ready to fork over when it’s time to buy, you also have to consider insurance, taxes, maintenance, decorating, and utility costs that will come after you leave the closing table. You likely didn’t have to worry about those costs as a renter, but people who are mentally prepared for homeownership recognize that having an emergency fund built up for maintenance and unexpected home repairs is imperative. Even if your mortgage payment could be less that what you pay in rent, that doesn’t save you from unavoidable home expenses you weren’t responsible for in the past.
Other Debts are Minimal
Having debts such as student loans or car payments is not always a bad thing. But, having too much debt can affect your ability to purchase a home. Mortgage lenders need to know that a loan recipient will be able to make their monthly payment. That’s why your debt-to-income ratio (the amount of debt you have compared to the monthly income you make to pay it) needs to be 43% or less.
If your financial house is in order, you will likely be able to qualify for a mortgage and comfortably make the payments each month. But if you’re worried the other debts you have will hinder your ability to do so, it would be wise to work on paying those obligations off first before considering a mortgage.
Buying a home is one of the biggest emotional and financial decisions you’ll ever make, so The Adler Home Team hopes this information will be useful for your future as a homeowner!
About the Adler Home Team
When looking to buy or sell in Northern New Jersey, you may rely on The Adler Home Team and their intimate knowledge of the distinct communities throughout the region. Jeff & Debby Adler continue to lead with contribution and have served over 1,100 families in their 20 year experience in Northern New Jersey. Through their combined efforts, this team of eleven professionals is very diligent in serving a full array of clients from first time buyers to those seeking their expertise in Residential, Condos, Townhomes, Luxury, New Construction, Relocation, Short Sales, Foreclosures and Rental Properties. By accessing the very best in technology, current market data and creative marketing applications, The Adler Home Team takes every measure to ensure that their clients are educated and provided with the critical insights that meet their specific requirements. They teach, lecture and train at the national level on negotiation skills, marketing and team building. The Adler Home Team is most proud and thankful for their strong referral business that confirms their talents, creativity, professionalism, diligence, knowledge, and outstanding integrity. The Adlers look forward to forming a partnership with their clients to help them reach their goals and make smart business decisions. So, when it comes time for you, a friend, or a family member to make a move, trust the Adler Home Team to win for you. Google View all posts by The Adler Home Team →