All those hours spent binging on HGTV have finally inched their way from your subconscious to your conscious mind, and you are ready to pursue the homeownership dream. Don’t get us wrong, the renting world definitely has its perks and if you love avoiding those pesky repairs, it’s nice being able to put that burden onto someone else. But at some point, those episodes of Flip or Flop will eventually catch up to you, and owning your own space to mold into whatever your mid-century-boho-vintage-rustic-modern-glam taste is will be at the forefront of your mind. Here are some clues that may mean it’s time to buy!
1. You’re Ready to Plant Some Roots
Nomadic lifestyles can be fun when you’re younger, and renting is a great option for someone that’s non-committal and wants to try out different neighborhoods. Eventually, however, you might get the urge to settle down and stay put for a few years. If you know you want to stay in one place for a few years, then owning a home could be a good option for you.
2. You’re Itching to Make Upgrades
Do you daydream about wood floors? Tearing out that laminate countertop and replacing it with a waterfall edge of quartz? If you’re starting to drool over interior design, you’re probably motivated to buy property you can customize and have your way with. For example, if you work from home now, you may need a workspace in a nook or closet. Alternatively, if you or a family member is disabled, you may need to make specific modifications that’ll make life easier, like ditching the staircase, lowering the countertops or building an accessible shower.
When you rent, things like paint color and replacing fixtures often must be approved by the owner. Large changes are completely out of your hands. If you’re itching to make certain adjustments and have control over your own home, then ownership can give you the freedom to tackle anything you want. That said, when things do need fixing, all costs fall on you to make that happen. Remember what Uncle Ben said, “with great power comes great responsibility.” If you’re ready for complete control (and responsibility) let’s talk homeownership.
3. You Need Elbow Room
Being hunkered down at home has opened a lot of eyes over the past year. What used to be just simply the sleeping chamber is now the studying, working, lounging, cooking, and snoozing headquarters. If you’re single or you live with a partner, a one-bedroom apartment can likely suit you just fine, and a two-bedroom suite can feel like a mansion. But eventually, you might outgrow that space. Factors like kids, hobbies, and a remote business could mean that you require a yard for entertaining, an extra bedroom for school, or an office for work. If you’re looking for more space, you might as well invest in your own property as opposed to paying someone else’s mortgage.
4. You Can Manage the Money
When you rent, you need to budget for your monthly rent check as well as utilities if they aren’t included in your lease. But when you own a home, there are a few more expenses that you have to manage. A mortgage, utilities, taxes, and potential HOA fees can definitely add up, so be sure to do the math on the property and neighborhood you’re considering before you think about taking the plunge and buying.
There are also other monetary factors to consider, including the next three tidbits:
5. You Have a Down Payment on Deck
In order to buy a home, it’s commonly suggested that you have 20% of the total cost of the property ready for a down payment. In fact, most lenders won’t issue you a loan if you don’t. That means if you’re looking at a property that costs $300,000, you’ll need to put down at least $60,000 in cash. That doesn’t include closing costs either. Before you decide to buy, be sure you can manage the up-front cash costs that come with it.
6. When Life Happens, Consult Your Emergency Fund Lemonade
Emergencies are always unexpected, yet inevitable in life. It is important to take into consideration problems that you may come across that aren’t always apparent. When you buy a home, not only will you want enough money in your bank account to cover a down payment, closing, and moving costs, it’s also smart to have an emergency fund at your disposal to help you with any unexpected financial requirements. Most recommend at least three months of living expenses as a cushion. This can be key in keeping your head above water if the unexpected happens.
7. You Can Afford the Upkeep and Maintenance
As mentioned, renting is lovely for those that prefer a hands-off approach to the handy work of keeping a house up to code. Taking care of a home takes a lot of work, and when you rent, you can rely on an owner, superintendent, or building manager to take care of things when the going gets tough. When you own a home, you not only need to manage the day-to-day upkeep but also everything else from plumbing issues to roof repairs. If you’re handy with tools, then you might be able to manage the minor to medium jobs yourself. But when the larger issues crop up, you need to be prepared to call in the experts (aka forking over more money).
8. Your credit Score is on Point
Unless you can or prefer to pay cash upfront, you’re going to need a mortgage to buy a home. Banks and lenders want to know that they can trust you to pay them back. This is why they’ll take a magnifying glass to your credit score. This score is based on your past spending, accumulated debt, and repayment activity. Credit scores range from 300 to 850 and anything above 720 is considered excellent. Before you consider a pre-approval letter, make sure your credit score is in good standing.
9. You’re Realistic About the Market
If you’ve ever scrolled through Zillow, you’ve probably stuck your nose into different cities and groaned over mansions in Texas being the same price as 2-bedrooms in California. The housing market varies widely from area to area and year to year. Before you decide to buy a home, be sure you have a good idea of what you can actually afford.
Renting a home can be easier on your bank account than owning, especially if you live (or want to live) in a popular area where the price of real estate is exorbitant. If you can’t afford to purchase a home in your desired neighborhood, but you definitely want to live there, then you might want to stick with renting.
10. Selling Doesn’t Scare You
Buying a home might be your way of getting into the real estate game. Just like with jobs, the first place you purchase will more than likely not be your last. The majority of homeowners tend to live within their means and begin with a smaller house, townhouse, or condo. They slowly work their way up to something larger! Selling your first home can be just as emotional as buying your first home (your baby). Be sure you lead with logic and are prepared to sell when the time comes.
Ready to Buy?
Contact a Your Castle agent today for active listings in your area!