There are many reasons people rent homes/properties. It may be your first time living on your own. It may be a temporary living situation, you may not be financially ready to be a homeowner. Maybe you’re working on building your credit so you can be a homeowner. No matter the reason, there most assuredly come a time when you are ready to be a homeowner. When that time comes, what do you do? You certainly need a navigator, a guide to help you along the way. That will bring you to a Realtor. They will be your guide. Here are things you need to consider prior to taking the step from renting to a homeowner.
What is your financial situation?
Buying a house is a great way to put down roots and build wealth ( homes tend to appreciate over time so you can sell later for a profit). However, purchasing property isn’t a simple process, so you should make sure you’re prepared. Buying a home is a hefty purchase, probably the largest you’ll ever make. So, you’ll need a down payment (typically 20% of the home’s purchase price) and steady income to pay your mortgage. The other costs also associated with homeownership are closing costs (typically 2% to 5% of the home’s purchase price), homeowners insurance, upkeep and maintenance, utilities, and a budget for unseen repairs and emergencies. While renting might seem more economical than owning at first glance, that’s not always the case; you might be surprised by the results!
It is critical in the process of figuring out whether you can afford a house is to enter your salary and town of residence into a home affordability calculator, which will show you how much you’d pay for a mortgage on a typical house in that area. You can also talk with a loan officer about whether you would qualify for a mortgage, and how much you can spend comfortably.
What is your current job situation?
Your job situation is not only important in terms of income to buy a home, but also whether you’re committed to the location and where you work and plan to stay put. Once you own a home it anchors you to one area, unless you sell your home. It may be better to wait to purchase a house until after you’re firmly established in your employment situation, it takes more time to move when you are facing the selling of your home.
Where you want to live?
You really need to make sure you’re picking a home in an area where you’ll be happy. Since moving once you own a home is not as easy as just packing your bags. It’s not easy to just sell a house and move to a new one if intolerable neighborhood issues come up, since the transaction cost to sell—up to 8% to 10% of the sale price for brokerage fees, escrow, title, and other costs of sale can be relatively expensive. So you need to really scope out the neighborhood where you want to settle in. When in doubt, try renting for a few months to make sure you like the area before you start shopping for a home to own in that area.
Let’s talk home maintenance, how much are you willing to tackle?
If you love the challenge of fixing little problems that pop up and ensuring your yard is well maintained with a beautiful curb appeal, homeownership may be right for you. However, if the idea of mowing a lawn or messing with the A/C or a leaky faucet stresses you out, then you may want to stick with renting, which gives you a safe and wonderful place to live with the reassurance of someone to take care of any issues that arise.
Apartment renters don’t have many home-related responsibilities, If something breaks, you can call the landlord. You don’t even need to worry about setting up utilities; they either come with the building, or the process is merely changing the name on an existing utility account.
There’s no landlord to call if anything goes wrong; it’s all up to you. So you have to be either adept as a handyman, or willing to find and pay someone else to repair issues. Or else consider buying a condo or co-op, where the lawns and public areas around your home are maintained by hired help.
Bottom line: Owning a home is a tremendous commitment. So before you jump into it, you should have confidence that this is the right move, at the right time for you and your family.
There is no timeline expected for you to be a homeowner. Some people rent for the long term, others purchase. This is a personal decision that has to be made at the right time for you and your family. Owning a home is a wonderful investment and it allows you a lot of freedom in the choices you make for your home, but it also comes with tremendous personal responsibility.
Our suggestion is to meet with a Realtor, allow them to be your guide in this process. Ask one hundred questions, make plans, go look at many properties as you work through the decision and ask the question…. Shall I rent or buy??
