Are you renting now but thinking about jumping in and buying your first home? There are five key things you need to consider when making this decision.
If you’re currently renting, should you buy your first home or continue renting in our market? There are five key things you need to think about to make this decision.
1. Are you financially prepared? You’ll need to make some form of down payment, and even if you’re financing 100% of the home, you’ll still need to put down a somewhat sizable deposit at offer, purchase, and sale. You’ll also need closing costs, which can be around $5,000 to $7,000 to pay for the loan, attorney’s fees, and other closing costs. Then there are out-of-pocket costs like the home inspection, the first year’s home insurance, or an appraisal to consider. You also should have some reserves so your savings doesn’t run completely dry.
2. Be prepared to compromise. You may want the $100,000 kitchen and all the amenities of a dream home, but it’s your first home, so you may have to back off a bit to find a home that fits you.
3. Are you emotionally ready? When you rent, you call the landlord if your fridge or microwave breaks, and if the rent goes up, you can move out and move on. If you’re a homeowner, you need to be ready to pay higher taxes and replace things when they break.
4. Will owning a home pay off in the long run? Outside of the recent crash from 2007, real estate has always provided positive growth and gain. Most likely, when you buy, you’ll pay the same (or even less) than you would in rent. Even if you’re not, there are the advantages of taxes, depreciation, and overall equity gains that you don’t get by renting.
5. Has your lifestyle outgrown renting? Have you had kids? Do you need more space inside and outside your home? If you’re having these thoughts it’s probably time to start considering buying.
If you have any more questions about renting versus buying, don’t hesitate to give us a call or send us an email. I hope to hear from you soon!