For many people, the switch from renter to homeowner is one of the biggest financial and personal decisions they will make in their lives. When thinking about buying a home, do your research to see if you are ready to make the transition. Realtor.org reports that the first step for nearly half of all home buyers was to research properties online, while 12 percent first looked for advice about the home purchasing process online. Let’s look at how to know if you are ready to go from renter to homeowner.
Your personal situation plays a huge part in whether or not you are ready to purchase a home. Renting makes sense for people who must move a lot for school or work, but if you are ready to settle down for several years, then buying is the way to go.
One of the advantages of purchasing a home is the stability that it brings, but you need to have a stable situation for home ownership to make sense. Homeownership comes with tremendous freedom — the ability to decorate, renovate and take control of your domicile becomes yours when you no longer have to follow rules set by a landlord. However, the exchange is that if something needs repair or work, it’s on you to do it. If you are prepared to take on that level of control and responsibility, purchasing a home is a good fit for you.
Your finances play a critical part to whether or not you are ready to purchase. Owning a home is about more than just paying the mortgage – you need to also set aside money for utilities, trash, sewer and other expenses. Compare prices and calculate what your monthly cost of living will be in various neighborhoods. If you can look at your finances and see how to make it all work, you are in a much better place when it comes to home ownership. Vertex42.com features a home ownership expense calculator that is helpful, too.
If you rent, the costs of maintenance, landscaping and recreational features such as a swimming pool are covered. If you buy, you’ll have to account for this when figuring out what you can afford on a monthly basis. PoolProducts.com has an excellent article on affording a swimming pool installation.
It usually doesn’t take a long time to get approved to rent an apartment, but the process of purchasing a home can take a while. The actual time from when you close a home loan isn’t that long; according to Credit.com, the average time is about 30 to 45 days.
However, this doesn’t take into account the time it takes to shop around and find the right home for you. It may take many visits to many homes to find the one that is a good fit, and underwriters may request additional documents once they examine your credit history and loan file. Make sure you aren’t racing the clock and make time for the possibility of an appraisal delay or inspection delay. If you are running up against an expiring lease, you may find yourself without a place to live if you don’t give the process adequate time to conclude. Purchasing a home is a big step in your life, and you don’t want to make a decision of such magnitude under pressure.
Did you enjoy this post? Find more money saving tips here.