Buying a home is considered one of life’s biggest accomplishments. It symbolizes stability, success and the overwhelming feeling that you have finally made it.
While it is one of life’s biggest accomplishments, it is also one of life’s biggest commitments. And how will you know when you are ready to take on that commitment? Marriage, one of life’s other biggest commitments, is often described in a feeling, a feeling that when it is right, you just know. Is that the same with a buying a house? Will you just know?
I’m not sure what to believe. But I do know that when making an extremely large purchase, it requires serious thought and consideration. Should you buy or rent a home? Many people think buying a home will give you more assets since you are not wasting your money away on a rental. But others find owning a home a liability.
Before you decide which housing option is right for you, here are a few considerations to add to your decision list before you sign on that dotted mortgage line.
- What is your commitment style? Do you have a hard time with commitment? If you can’t even commit to what you should have for dinner, buying a house might not be for you. A mortgage is a binding contract that can, and will, follow you even if you stop paying for it.
- What are your short- and long-term life plans? Imagine where you want to be in 6 months? Now, try that for 1 year, 5 years, 10 years and 10 years. Do your life plans involve you sticking around in the same place for a few years or do your plans have you moving around? If you plan on hunkering down and growing some roots, buying a home can be a great option. However, if you tend to move around a lot or are considering life options that will make you move (schooling, job options), cementing roots in one place can be more detrimental than anything.
- What condition is the housing market in? If you are looking to buy, now is the time. It is what they call a “buyers market,” meaning more people are looking to sell rather than buy. This is good news for buyers. Many sellers are willing to make serious deals which gives the buyers the upper hand. It also gives buyers many options for finding the right home. However, the market can fluctuate, and will, at any time. The downside for sellers is that their homes are selling for significantly less money than the home was originally purchased for.
- What is your cash flow/ financial situation? The biggest consideration is if you can afford to buy a home. As I mentioned before, buying a home is a contract. If you are unable to pay your mortgage, your home will be repossessed and you will be kicked out. Consider if you have a steady income, savings and enough money for a decent down payment. If money is hard to come by, you might be better off renting a home without the risk.