There’s No Place Like Home: Three Considerations When Buying a Home
Despite the fluctuating housing markets in the past decade, purchasing a home can still be a good investment, depending on the area in which you live, your income, and your desire to live long-term in a particular area. It may be nice for you and your family to have a sense of being settled, as well as pouring your money into your own investment instead of a rental agency’s or a landlord’s. Small improvements around the house may be a profitable investment later, especially if you are trained and equipped to do a lot of the work yourself. Here are a few things to keep in mind as you consider purchasing a home.
Consider Your Income
Though purchasing a home is a good investment in most areas, it’s important to consider this factor: Though owning a home will likely pay off in the long run, since you’ll be putting money into your own investment instead of paying rent to an outside party, your money will be tied up in the home. Unlike saving money in a high-interest savings account, you won’t have access to the money unless you sell the home. It’s important to consider your level of income compared to the amount of your house payments and the projected value of the home in the future at a time when you may want to sell it. Ensure that you make enough money to allow you to have your investment tied up in the home for several years, until it’s time to sell.
Most likely you will need to get a home loan in order to afford a house. You’ll need to save up a down payment. The amount of this down payment may greatly influence the interest rate and the amount of money you will need to pay each month. You will also need to consider moving costs, improvement costs if the home is not move-in ready, and property taxes. Do your research to determine where to get the best home loans at an excellent home interest rate that works for you. Take your time to save up a down payment, and keep in mind that what you can afford may not offer you all the amenities you hope to find.
Consider the Market
All of us would likely love a move-in ready home in a great, safe area, with lots of amenities at a great price. The reality is that you may not find everything you want at a price you can afford. Prior to meeting with a real estate agent, determine your must-haves. This is especially important if you are making this decision alongside a spouse or partner. Once you determine the things you can’t live without, do some research on areas where you’d like to live to see if it’s possible to get what you prefer in your price range. If not, it may be time to compromise the area or a few of those must-haves.