home ownership

Important Considerations For the First Time Home Buyer

Important Considerations for the First Time Home Buyer

Buying a home is a big decision, very big. Being it will most likely be the largest purchase you will ever make, give it lots of thought before doing anything. Let’s go over the facts of home ownership before deciding that buying is right for you.

What are the reasons why most people buy their own home? How will you benefit from being a homeowner?

• Buying a home puts money to work for you – your money and other people’s money.
• Mortgage interest is tax deductible. This can save you a significant amount of money at tax time.
• The money you pay each month to live (currently in the form of rent) will go toward the equity in your home. Home equity is a great money source from which you can borrow in the future for home improvements, eliminating debt, or paying off unforeseen expenses. Home equity can also put a lot of money in your pocket if you were to sell your home for more than you paid.
• Owning a home can increase your net-worth.
• Timely payments on your mortgage will help you establish good credit.
• The satisfaction of owning your own home is a subjective, yet popular reason for wanting to buy a home. You can make improvements to your home according to your own likes and lifestyle – without having to check with anybody first.

These reasons are quite compelling. But before taking the plunge, be aware of the practical considerations of owning a home. Think these through:

Timing

Is the timing right? If your family is growing and you need more space, yes now might be the time to buy. If however, you are making a career change which may relocate you to another city, going back to school, etc. now might not be the time to make the purchase. Also consider if you have the time right now not only to look for a home but to maintain a new home.

Home Needs and Wants

Are you sure you know what you want in a home? Before spending too much time on the internet searching for homes or driving around looking at houses for sale, make sure you know exactly what your home needs and wants are. The last thing you want to do is assume a particular home or neighborhood will “be fine” just to be disappointed later. Give your home buying wants and needs the time and thought they deserve.

Affordability

Can you afford a home? While it is true that you will be borrowing most of the money you need to purchase a home, there will be multiple expenses that need to be paid up-front. These include a down payment, inspections, reports, closing costs, etc. And of course, ask yourself if you can afford the monthly payments in order to pay back your loan.

Responsibility

Are you responsible? There are other responsibilities to owning a home than making a mortgage payment each month. You will now be completely responsible for home maintenance and home repairs. Are you ready to mow the lawn yourself or can you afford somebody to do it for you? Replacing the roof is now up to you as is buying that new refrigerator. Make sure you have the inclination, time, and money to be a responsible home owner.

Flexibility

Are you ready to commit to one place for a long time? Unlike a yearly lease that allows you to pack up and move at virtually any time, buying a home will essentially tie you down. Consider your flexibility. If you think you may need or want to move any time soon, put off buying a home.

As you can see there are many issues to evaluate before you rush into purchasing a home. Think through each thoroughly before you commit to home ownership.