Home ownership is seen as one of the major adult milestones in life. And, we all need someplace to live, so it makes sense for most of us to buy a home rather than keep on renting. While buying a home is a worthy pursuit, the pressure to become a homeowner can lead to some poor decisions, like buying a home to soon or buying one you really can’t afford. Homeowners expressing regrets about their path to ownership are all too common, and it is important to think carefully before taking the plunge to determine if the time is right, and if so, what type of house you need and how much you can spend.
Whenever we are poised to make a big decision, it is always good to examine our motivations, and the decision to buy a home is certainly no exception. This is the biggest financial commitment you will probably make in your life, and it will have a huge impact on your lifestyle. Owning a home is a huge responsibility to boot. If you are thinking about getting a house, ask yourself why. Some good reasons include really wanting to put down roots and having a place to raise a family, building equity, wanting a space to call your own and taking advantage of the tax benefits of home ownership. If you are being pushed towards this path because of some sort of pressure you are feeling from family or society at large, or because you just think it is what you are ‘’supposed’’ to do, you may end up regretting your decision.
What is a Reasonable Mortgage Payment?
One of the biggest mistakes people make when buying a home is buying one they really can’t afford. Sure, they can write that check every month; but it feels like they are sacrificing themselves to their home, that every spare dollar is going towards their mortgage payment. It is crucial to understand the amount of money for which you are pre-approved is not necessarily an amount you should be spending. Sure, you could afford to pay 2,500 a month, but do you want to? How would that impact your lifestyle? What would that mean for your savings account or your contributions to your retirement funds? Would it mean drastically altering your social life or your yearly international vacations that you so look forward to? Be careful about getting carried away with getting the most house you can possibly afford, thinking that you will have no problem making drastic changes to your current circumstances to be able to afford it.
What Are My Needs and Wants?
Shopping for homes is really exciting, and getting too swept up in that excitement could cause a heap of problems for you. Before you even start looking for a house, think carefully about what type you want. List out your needs, the things that it must have, and then on a separate list, outline your wants. The former can be boring, but they are important. Keep this in mind when getting all googly-eyed over the house with really cool architecture, but is twice as far from work as you need it to be, in an area with nightmare traffic.
Whether the time is right to buy a home is based on many individual factors. The simple fact that it may be a buyer’s market or interest rates happen to be dropping should not be the main drivers if you feel any hesitation. Think it through.
About the Author:Kelli Cooper is a freelance writer who enjoys blogging about all things real estate; she recommends you see this if you are concerned you may not qualify for traditional financing for a mortgage.