How to Make the Decision To Buy Your First Home
There comes a time in every persons life where they start to itch to have their own home. But making the decision to buy a home doesn’t come lightly. There is a financial responsibility that is not easy to get out of once you purchase your first home.
Now more than ever as rents are rising many potential first time home buyers are looking at rent vs buying. A recent analysis I did of a Tewksbury MA condominium showed that owning was actually cheaper than renting!
Wanting to own a home and it being practical are not always in sync with each other. It is not all that uncommon to meet with a first time home buyer and we conclude that the timing on buying a home is not right during the initial home buyer consultation. It could be they need to take six months to straighten out finances or I discover in talking to them they may be transferred in the next 6 to 12 months.
If the timing is not right that is certainly alright. You can put a plan in place for the future to buy your first home. You certainly don’t want your American Dream to become a nightmare and have to do a short sale because you couldn’t pay your mortgage or worse, have the bank foreclose.
6 Reasons First Time Buyers Decide to Buy a Home
Making the decision to buy your first home can be very personal and vary greatly. But here are some of the more popular reasons:
- Freedom- You can own and control your own space without answering to anyone. Paint your kitchen pink, or change some flooring…. its yours no one can complain.
- Stop Paying Rent- You want to stop paying your landlords mortgage and build equity in your own home.
- Feeling Settled- Knowing your rent won’t rise or you may be asked to leave at a moments notice will give you peace of mind.
- Pride- Whether its a condo a starter home or your forever home, your hard work and being able to buy and maintain a home gives you a sense of pride.
- Sense of Community- Most home buyers buy a community as well and allows you to settle in and enjoy your community.
- Investment- Homes over the long haul appreciate. Also with owning a home comes the tax breaks from paying interest and property tax on your primary residence. Financially its forced savings.
Maybe one or more of these reasons is driving you to make the decision to buy a home. But, there are also some practical consideration to be made before making the decision to buy your first home.
Practical Factors That go into the Decision to Buy Your First Home
You Have Savings
There is certainly a cost to buying a home. Minimally you will need about 3-5% in down payment if not more as well as closing costs to qualify for a mortgage. And, while the bank does not require a financial buffer it is wise to have 2-6 months in savings as a buffer.
Your Job/Financial Future is Secure
Of course you don’t want to venture into buying a home if there is any uncertainty with your job. Make sure you are on a stable career path for some time to come. Most folks looking to buy their first home have been in a career for a period of time and are looking at their income increasing in the years to come.
Your Credit is in Order
Your credit does not need to be absolutely spotless for you to buy a home. But, don’t buy a home if your credit is a disaster.
Straightening out your credit is is relatively easy and can be fairly fast if you put your mind to it. Your real estate agent and mortgage banker will have the resources to help you work on bringing your credit score up to purchase your home.
Can You Plant Roots in a Community
The advantages of owning a home are played out over time. Changing a home when you already own a home involves time and money, so changing a home is not as easy as getting a new apartment. If the idea of settling into a community is attractive and your life allows you to do so, than buying a home could be right for you.
If you don’t know where your job or career is going to bring you in the near future, buying is probably not smart.
One area homeowners forget is ongoing maintenance. When you rent a home the stove breaks you call the landlord, the roof leaks you call the landlord, the furnace isn’t working you call the landlord. The landlord fixes the problem.
As an owner those ongoing maintenance issues become yours. So on top of the mortgage you will have to plan a a couple of $100 a month that goes to emergency maintenance or long term maintenance. It is an extra expense some home buyers forget.
Final Thought On Making the Decision to Buy Your First Home
If buying a home is attractive to you for various reasons and you feel you can make the commitment financially and emotionally than certainly go ahead and pursue purchasing a home.
Don’t be afraid to contact a mortgage originator to run numbers to see it the decision to buy a home is right financially.
Also an experienced buyers agent can help decide if the timing is right to buy a home for your personal circumstances and set you up to receive properties that may fit your budget and criteria so you can get a sense of what is available.
Other First Time Buyer Resources
- Bill Gassett 7 First Time Home Buyer Mistakes
- David O’Doherty 7 Things Home Buyers Should Check for Themselves
- Dan Barcelon A Checklist for the First Time Home Buyer
- Lynn Pineda 20 Cold Hard Facts for First Time Home Buyers
- Forbes 6 Things I wish I knew When I Bought My First House
Making the Decision to Buy Your First Home- First Time Home Buyer Advice, was provided by Kevin Vitali of EXIT Group One Real Estate of Tewksbury MA. If you would like to sell or buy a home give me a call at 978-360-0422 and let’s get the process started.
Real Estate Services in the following areas: Northeast Massachusetts, Merrimack Valley, North Shore and Metrowest. Including the following communities and the surrounding area- Amesbury, Andover, Billerica, Burlington, Chelmsford, Dracut, Groveland, Haverhill, Lowell, Melrose, Merrimac, Methuen, Middleton, North Andover, North Reading, Reading, Stoneham, Tewksbury, Tyngsborough, Wakefield, Wilmington, Westford