Should I Buy a House? Maybe. We will look at both sides of the coin. Sometimes it pays to wait. Sometimes it’ll cost you if you do.
Retail therapy is what many people turn to when they feel bombed by stress. It’s when one spends money on things they don’t actually need. This impulse-buying spree results in dopamine rush or happiness. It feels good. The rush is usually short-lived, but it’s fun while it lasts. When you come down from the happy place it gets dark though. Here we will examine the decision and process do buy a home. It’s going to be fun, educational, and a good guide for those considering homeownership.
When it comes to home buying, there are a whole lot of different stories. When not done right at the proper time, it could cause stress that could outweigh happiness. If the question ‘Should I buy a house?’ has been plaguing your mind lately, here’s how to know the right answer for you:
Do You Have the Money to Buy a Home?
If the answer is no, then yes, you shouldn’t buy a house. At least not yet.
The decision to buy a home is a really big deal and that’s exactly why it’s the very first step in our 11 steps to buying a home. Now if you’ve got a lot of debt and it makes you uneasy to have an on-going monthly house payment, stop right there. You can keep asking yourself questions like ‘should I buy a house now or wait until 2021?’ But if you don’t have the cash, you just can’t buy ever. Hit the brakes and wait a while until you’ve managed that debt before your move forward. Soon you will be applying for a mortgage and you will have to be honest in the way you fill out the loan application. Being prepared financially makes the loan process go a lot smoother. It all starts with having some money stashed away for you to use towards this goal.
Do You Have an Emergency Fund Saved?
The answer should be yes. Because yes, things can happen and you have to prepare for them before they even happen.
People lose jobs, unexpected expenses come up. That’s why financial experts recommend having six months’ worth of savings put away and saved. It’s not going to be used for home purchasing funds. This money is an emergency fund so that when emergencies arrive, you’re not left waiting to decide or not whether you’re going to make a house payment or handle that emergency.
You should never find yourself choosing to pay the house or not for the month. Once you purchase a house, it’s there for you to handle no matter what.
💲 Down Payment & Closing Costs
Do you have money saved for the down payment and closing costs?
Down payment for home purchases usually amounts to 3.5, 5, 10 or even 20% of the total home price. If you’re aiming for a fancy house with views of the Pacific Ocean, then you got to tighten your belt and prepare loads of cash. The down payment is the first thing you have to cover and that’s just the start of everything. If you’ve successfully clinched the deal, then congratulations to you. You’re in for a monthly mortgage.
🤑 Can You Afford to Cover Repairs?
The needed repairs for a house need only become crystal clear only after a thorough inspection. After that, you got to deal with the seller on negotiating about the repair costs. The seller might agree to cover some repairs or lower the total home price. Nonetheless, if you want a spotless home tailored to your taste and specific needs, you got to have them done before moving in. If the seller is not going to participate in the repairs you will need a good handyman to help you get things done (unless you yourself are handy).
🙋 How to be ready for buying a home?
Time to save up.
Saving up to 20% of your income for the next two years might help. The average income of a first-time homebuyer amounts to $72,000 a year. You’ll have up to $30,000 ready for a down payment, closing costs, moving expenses, and other miscellaneous fees.
💳 Pay Off Existing Debts
Purchasing a home requires a large chunk of your financial resources. So before deciding to get on board, pay off your existing debts. Calculate debts that you can’t handle anymore when you start covering the monthly mortgage. You can start paying off the smallest amount and gradually roll over to the bigger amount. Before you know it, you’ve paid off everything and are ready for monthly home expenses. Now you have developed good saving habits that will help you once you become a homeowner.
🙅 No Expensive Purchases Right Now
If you’re thinking about that new car or that out of the country trip, decide to put them off the table for now. Acquiring new big purchases or expenses could affect your overall financial power for buying a home. Home buying needs total commitment. Exercising that commitment even before you found a realtor® and a home to buy is a plus.
👓 Don’t Look at Homes Just Yet
It’s tempting to look at homes online and craft a fairy tale scenario in your head. While daydreaming sounds great to motivate you to manage your finances better, looking at listings can get you confused in the long run. There are 11 steps in home buying and looking at homes before you have your ducks in a row isn’t on the list. It’s better to look at homes when you have your pre-qualification form and your agent with you. Agents can guide you with their knowledge of the local and current real estate trends.
😄 Should I Buy a House and Enjoy Doing So?
Buying a home should be an enjoyable process. Your future home is the embodiment of your hard work. Weigh your reasons of buying a house and make them a reason to be better at the home buying process. Every bit of purchasing it should cause happiness more than stress. It’s a simple way to measure your readiness to buy.
So make sure you’ve got these things in order before you begin the rest of the home buying process. Get your funds ready so when you ask yourself ‘should I buy a house now?’ You’ll like the obvious answer.
Explaining Housing Affordability – by Karen Highland
Should I buy a home on a steep hillside? – by Conor MacEvilly
Should I Buy A Home This Year or Wait? – by Petra Norris
Should I Build A New Home Or Buy An Existing Home? – by Kyle Hiscock
Buying The Best House in The Neighborhood: Pros and Cons – by Bill Gassett