Are You Ready to Buy a Home?
This weekend the challenge is preparing to buy a house. There are many reasons why you may not be ready to buy a house this year, but it is important to consider the option, and to take the steps to get ready to buy a home. You should never feel pressured into buying a home, instead you need to wait until you are ready. Planning and saving now will make it easier for you to purchase a house when the time comes.
First you need to determine if you are ready to buy a home. It can be difficult to determine if you should rent or buy. Generally, you should not buy a house unless you plan on being in the area for at least three more years. If not you will take a bigger hit than if you were renting. Another thing to consider is whether or not you are financially ready to buy a house. Not only do you take on a mortgage or house payment when you buy a house, but you also become responsible for all of the repairs that need to be done on the house. Home repairs and maintenance can be very expensive and you should have a good-sized emergency fund before you purchase the house. Plan for unexpected costs and prepare a budget and stick to it, so you do not overreach and face the possibility of losing your home.
What Type of Home Should You Buy?
When you are ready to buy, you may have several different options. If you are single, it may make more sense to buy a condo or a townhome that has less maintenance or you may want a place where you can have roommates. If you have a small family you may be looking at a starter home, but you should also consider things like schools in the area. You may be also be considering an older home that you plan to renovate. You may want to choose an option that allows you to grow a bit as a family. You definitely want to choose an area that you would be comfortable living in if you eventually had kids even if you are single.
Third, you should consider the different types of mortgages that are available. You should choose a fixed rate mortgage, not an adjustable rate mortgage. This means your house payment will stay the same. Additionally, you should go with the shortest term that you can afford. Fifteen-year loans save money on interest and the payments are not a lot more than on a thirty-year loan.
How Can I Prepare to Buy a House?
Fourth if you are not ready to buy a home this year, then what do you need to do to get there? Create a plan that will prepare you to buy a home. The plan should include getting out of any debt that you have, saving up an emergency fund in case you have a difficult time making a payment, and a down payment for your house. Often people make the mistake of buying a home before they are ready. A down payment will prevent you from going underwater on your mortgage if the value of your home decreases in the future. In the worst case you could lose the home, or you may begin to resent it, because it is limiting what you can do. Be sure you review these reasons to buy or to wait to buy a home before you make your decision.