MovingFamily

To buy or not to buy: What to think about before starting a house search

 

Buying your first home is one of the most exciting “adult” things you can do – but it’s also one of the scariest. With so much to think about and the ever-changing information about mortgages, home values, what you should look for and what you should stay away from, we came up with three main considerations to think about before stepping onto the first rung of the property ladder.

 

The Benjamins 

Let’s start with the elephant in the room – unless you’re really lucky, you’re probably going to need a mortgage of some sort to purchase a home. And this is the kind of loan that will likely compete with student loans when it comes to term length – expect to be paying it off for the next 15-30 years. There are lots of handy mortgage rate calculators out there, like this one from MortgageCalculator.org, so play around with the numbers and start getting a sense of what’s realistic for you.

 

Speaking of numbers, one of the key numbers you’ll be fiddling around with is your down payment. It’s generally recommended that you provide 20% of the total cost of the home as a down payment to avoid having to buy PMI (private mortgage insurance). PMI protects the lender from losing money if the borrower ends up in foreclosure.

 

Doing a little light math, a 20% down payment for a home priced at $275,000 is $55,000. For many, that’s no small drop in the bucket – but it is a realistic assessment of the amount of money you’ll need to save to get desirable loan terms, including a favorable interest rate.

 

Location, Location, Location

It’s been said again and again, but that doesn’t make it any less true: location is really important! And, when you think about the financial requirements that go along with purchasing a house, you’ll want to make sure that you pick a place you can stay in, at least for a few years. This is where you’ll take off your renter’s hat and put on that potential homeowner hat.

 

A few location questions we recommend asking yourself before you start a house hunt:
  • How much of a commute can I really live with – for 5, 10, 15 years? What’s the likely cost of that commute each year?
  • If I already have children or think I might want to start a family in the future, are there good schools within a reasonable distance?
  • Am I close to the people and places I love? Is there a convenient drugstore or grocery store?
  • How much noise can I really live with? Can I be on a busier street or a more bustling neighborhood or do I need a quieter part of town? 

 

The Day-to-Day

Keeping that potential homeowner’s hat on, let’s do a little role-playing. Imagine yourself walking into your new home after work on a Tuesday – you figured out the mortgage and you found the right location. You bought an ideal house, and it’s all come together. 
 
Now, imagine on this Tuesday evening, you put your bag down and you walk into the kitchen for a glass of water – okay, fine, a glass of wine. The minute you walk in, you notice the floor is wet. The kitchen sink is leaking, water is spreading everywhere, fast. It’s the second time this week. You:

 

A) Race to the sink, grab your wrench and get to work

B) Pull out your phone and call the plumber who was there on Sunday

C) Sit down in the growing puddle and start to cry

 
If you chose A or B, the responsibility of owning a home may work for you. Truthfully, even if you picked C, it still might be a good fit for you, and Tuesday was just a bad day. But, all kidding aside, when you own a home, you own everything about it. Before making any big decisions, be honest with yourself about whether owning a home – the financial, logistical and even emotional parts of owning a home – work for you right now.
 
Buying home is still very much considered a rite of passage – but like with any big decision in life, it’s yours alone to make. And something that works for someone else may not your best fit. So, consider the facts, do your homework and put your roots down when and where it makes sense for you.  
 

Share this article: