Buying your own home for the first time can an exciting step but also a daunting one. In this series of blog posts we break the process down into a simple step by step guide; in this first post we look at the factors you should consider before you make the decision to buy your first home.
Step One – Before You Buy
The decision to buy your first home is a massive financial commitment but it's also a huge emotional investment. For many people it is the culmination of a long-term dream, but before you take the leap and make those financial and emotional commitments it pays to be sure that homeownership is the right step to take and that now is the right time for you.
There's a long list of differences between owning and renting your home and pros and cons on each side. Some of the differences are general and some will be personal to you. In order to decide if it's the right time to stop renting and start owning you should consider the pros and cons in detail.
Firstly consider the following questions:
How financially stable is your life at present – and what are the likely future prospects?
Are you able to manage your own finances effectively and efficiently?
Have you considered the “hidden” costs of homeownership? These include both the cost of maintenance and the time that these can take up.
Using these questions as a framework consider the pros and cons of both renting and owning your home. List both and use the resulting lists to decide if now is the right time in your life to make the transition from rental accommodation to your own home.
Those Hidden Costs
One of the biggest factors that many people over look are the hidden costs in home-ownership. Making a sound, accurate monthly budget that accurately reflects your current situation will help to assess how much spare income is available to deal with these costs. When you have that budget consider the actual cost of owning your home. The most obvious cost involved in homeownership is the monthly mortgage payment – this may in fact be less than your current rental. However, you should also factor in utility costs and property insurance – this latter is a cost that you'll probably not encounter when renting.
Maintenance costs are also another factor to consider; while renting you may not have to consider these at all but even basic maintenance tasks will become your responsibility once you become a home-owner. If you searching for condos for sale this costs may be relatively low but if your dream home includes houses or homes with gardens or land you'll need to consider the additional cost in time, materials or labor that these will include. For this aspect of ownership you should consider not only your financial readiness but also your lifestyle – do you have the time to devote to your home that will be necessary, or can your budget stretch to pay for maintenance work?
Ready for the Real World of Home-ownership?
If you decide to take the leap into home-ownership don't be afraid to discuss the issues above with your Realtor. Top Realtors will be able to offer information and advice on many of the issues relating to ownership – including the likely level of insurance costs and the amount of time-commitment different types of property will require. This type of information can help to make the transition from renting to owning smoother and ultimately help you to find the home that is perfect for you.