Should you Buy a Home? – Top Points to Consider
Every one of us wants to have our own home!
But due to the nature of the job sometimes this becomes difficult to get one. Especially when you are in a job where you keep getting transferred from one location to another. Still, many of us believe to have one with the thought that either will live there or put on rent.
But have you ever gave it a second thought on whether you should really buy a home? Or you should keep on going with the rental accommodation?
Well, today I am going to talk about the same where we will discuss different points supporting this discussion.
#1. Think from the requirement
You should not buy a home just because everyone else is buying or your relatives keep on asking for one. You should plan to buy only when you feel the need. It’s a big financial commitment and so should be planned properly. The need can be in the form of anything starting from high rent to need of big space. Usually, when your kids grow they need some privacy and more space to grow and so these might not accommodate in a rental property. Along with these, there might be a situation when you have planned to finally stay in the current city and don’t have a plan to move further. In such scenarios, you may plan to buy one.
#2. How much you can afford
Once you have decided whether to go for the house or not and if you have decided to go for it then think about the cost. A usual house in the USA costs around $250k and you need at least a 20% down payment as well. So, even if you’re going for a home costing $200k then you need $40k as a down payment, and the rest you can get on a mortgage depending on your eligibility.
You may also use a mortgage affordability calculator to understand how much you can afford based on your other financial parameters including any liabilities. This site provides you the latest interest rate and also can compare between different lenders. You can fill out the different information like your salary, additional income, interest rate, liabilities, and others. And based on the input it will calculate and tell you how much you can afford for the mortgage.
For example- I entered a down payment as $25k and for 30-years, below are the detailed plan-
#3. Are you secure in your job?
This is another great point to consider before buying a home. As said earlier, buying a home is a big commitment and so should be planned well. As you might be planning for the mortgage also which needs to be paid on monthly basis and so you should have a consistent income source and what can be better than a regular job. So, assess your job and see if that is secure else find a new one and then go for buying a home.
#4. Think of future
When you buy a house then just don’t think of the current situation and make sure you consider your future plans also. For example, if you’re married currently with no kid then you might be ok with a one-bedroom flat but in the future, you may plan kids, and in that case, you may need a bigger home and you should plan them well.
These were some main points regarding the buying home decision. We have talked about some great points related to the decision of buying a home and planning the financials. You may follow these and plan your next home well.