How much will your home rent for?
To Rent, or to Own?
You’ve been renting for years. It was the easy thing to do, and besides, you weren’t ready to settle down. But now, things have changed. Maybe you’ve been in your current rental for 3 years and you’re starting to wonder whether you want all your money sinking into temporary housing that doesn’t build equity. You’re in the right stage of life where owning a home makes sense, and you feel it could be a good investment.
So where do you get started?
Budget – Understand what costs go into buying your first home. Can you afford the down payment? Typical down payments are around 20% of the home cost.
Maintenance – Owning your own home requires maintenance, and you have to be ready to take care of any issue that may arise. Are you ready for the absolute worst to happen? Everything that you do (or don’t do) affects the value of your home. Think of it like a child – you want it to grow up and be big and strong. And maybe make you lots of money someday.
Your Future – Fast forward 5 years – it’s the age old question: Where do you see yourself? Hopefully.. with a home making your payments. If not, reconsider. To avoid potentially losing a lot of money, you want to be in your home at least 5 years. Do you see yourself in a steady career pathway that can support the monthly payments?
Savings Fund – The golden rule is to always have enough cash on hand to live for at least 3-6 months should you lose a substantial amount of your income. Consider this before deciding how much “extra” cash you actually have laying around.
Credit – How is your credit score? Making good financial decisions even 2 years in advance to buying a home can be a good decision, putting you in better standing with lenders.
Taking the plunge into home ownership can be an exciting thing, and fruitful if you choose the right timing. Make a solid decision with these tips above so you can set yourself up for success.