As HENRYS (high earners, not rich yet) continue to contemplate their big city life over fleeing to the suburbs, there are several questions that should first be considered. If you are one of these people who have started wondering whether you should continue to rent or take the steps necessary to purchase a home, keep reading.
For some people, this may feel like an emotional decision. In reality, it is one that should be made based on your finances, as well as your preparedness for owning a home. Before you make any real estate purchase, you should ask yourself these questions to figure out if you are really ready to buy.
• Do You Have a Down Payment?
The first thing you need to have before you can buy a home is a down payment. While there are a few different mortgage financing options that require a low down payment, it's not very likely that you'll be able to buy a home without any money to put down. If you do not have the money to put down for the purchase of a home, then it may be a good idea to wait and reevaluate your situation. If you still really want to buy a home, take some time to save for the down payment. The more that you save in the beginning, the more you will save in the long run over the course of a mortgage.
• Do You Want to Stay There a While?
If you are unsure of whether or not you want to remain in a particular area for a while, then you may want to hold off on buying a home. Buying a home is a big transaction, and unlike renting, it is not really in your best interest to move every couple of years. Of course, if you do move, you still have options to help you financially. For example, you might choose to rent it to someone else. But if that is also not something you want to do in the future, then you may want to reconsider.
• Can You Afford All the Costs of Home Ownership?
There is much more to owning a home than paying the mortgage every month. In addition to that, you will need to pay for taxes on the property, your insurance, and any repairs. As a renter, your landlord is the one responsible for repairs, but obviously that changes with homeownership. What if your air conditioning unit breaks during the hottest part of summer? You should be prepared for these unexpected and unfortunate occurrences by having enough savings in place.
Buying a home is a big investment and important step in life. But before leaving your rental situation, take the time to fully consider your options and prepare for all of the financial responsibilities you will face as a homeowner for many years to come.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specic information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.