Many people like to own a home because of one simple reason—the sense of pride and freedom a homeowner has can’t not be compared to renting. Whether you have enough of living in parents’ home and you want to move, or having a customized home has been your dream, or want to settle down with your partner and buy a house, or you want to throw a huge investment into real estate industry.
Buying a home is the most significant financial decision in a lifetime because it requires a great amount of money. This is not a decision that you can easily reverse if you make a wrong decision, so you want to make a best decision and get the entire process right.
Regardless if you are a first-timer or you are a real estate investor, consider these factors below before buying your property in order to ensure you make the best decision.
You Don’t Have a Buy a Home
Who says you have to buy a home otherwise you would be regarded as a failure? Buying a home is a huge decision for everyone, and it is not supposed to be a decision made for everyone. Some people move around a lot and are happy with renting, so buying a home is not for them. Buying a home involves many factors in life that you need to consider like housing market, interest rates, timing and your future plans. Weigh up all factors, and probably you would realize buying a home is not for you and you better off renting depending on what you are doing and what you want. And that is totally fine.
You can talk to a few different real estate companies and consider what they have to offer. I was recommended to use a company which is reputable for its trust-worthy and wide-ranging services.
Do I Have Enough Cash for a Down Payment?
The first 20% down payment is incredibly important. If you don’t have enough cash for the down payment, you will end up handing in money to the bank to make up for it.
20% is the amount of equity lenders require so that you can avoid paying PMI, or Private Mortgage Insurance. When you don’t have a 20% down first, most lenders usually require you sign a mortgage insurance and that is where the interest rate adds up and you would end up paying more money.
You can choose to wait till you save up enough money for the down payment then consider buying a home. All it does is to save yourself money.
Do You Plan to Live There for At Least 5 Years?
If you are not sure about your future plans and there is a possibility you might move to a new country or city, it is not the right timing for you to buy a home yet. It is said by some finance experts that you likely won’t regain any of the expenses associated with buying and later selling the house, unless you plan to live in a home for at least five years.
Who will live in the House and Will that be Changed Soon?
Determine this factor associated with age and plans of people who will live in the house as well as the possibility that current situation changes.
- Are you single? Are you looking to meet someone special and settle down? If so, one room may not be enough.
- Are you and your partner going to have children? If so, consider getting a bigger house for future babies.
- Are you retired aged over 60? If so, you want to buy a single-story house instead of one with stairs.
Take potential guest into consideration and you might want to add a guest room.