Deciding when to buy a home is a personal, financial and emotional decision. Exploring the idea, stages and requirements involved in home buying is a good first step to making the right decision.
- Renting versus buying: Don’t just focus on the monthly payment. It is important for your mortgage or rent payment to be manageable, but take into consideration the mortgage interest deduction, or the emotional comfort of having your own home.
- Future plans: Where will you be in the near and distant future? There are options of what to do with your property in the short or long term, like living in it, renting it or selling it. These options will depend on future market values and if you are planning to expand your family, or eventually move. You should take into account the amount of time you are planning to own the home.
- Building wealth and investing in your future: While there are no guarantees or crystal balls on the future values of real estate, you will build equity in your home over the long run by paying down your mortgage or realizing an increase in value when you sell. When you invest in your own property, you benefit from protecting income and are investing back into your own pocket.
- Current interest rates and home prices: Trying to perfectly time the market is nearly impossible. Historical information and current market trends are interesting, but the market is cyclical and the value of owning a home isn’t just in the equity you build, but also in the memories you build.
- Your financial status: Are you ready for the financial responsibility of owning a home? You should consider all costs involved: down payment requirements, mortgage payment, homeowners insurance, property taxes, association dues, etc. Properties need tender loving care so the amount, and cost, of “fix it” items will vary depending on the condition of the home you buy.
- The comfort of a home: Owning a home isn’t just about the investment or equity. It is a place to create a comfortable environment, a place for family and friends, and a place to create memories. The emotional benefits of a home are priceless.