Buying a house is a huge decision. We never know just exactly when the perfect time comes along to take the plunge.
Many first time home-buyers go through the same trepidation. It’s a huge undertaking, not only the financial investment of the house, but there will be additional costs such as:
- Moving Expenses. This can be anywhere from a few hundred to several thousand dollars.
- Home Staging & Cleanup. Selling the old house normally requires a list of things to fix before it goes on the market.
- Junk Removal. If you have a cluttered basement or attic – it might be better to have the junk items hauled away by professionals.
- Redecorating Expenses. Sometimes you just can make the old stuff “fit” in the new house
- Time off work. If you schedule a mid-week move, many times you can get a nice discount from your movers – so be sure to ask!
So, if you are a first time buyer – it never hurts to keep an eye on the market and mortgage rates so you become familiar with the averages in your area. And always keep an eye out for that perfect property for sale – you never know when a bargain may come along.
Here are a few good points to evaluate before you take the plunge.
1. How Stable is Your Job? Have you been with the company a long time? Is your industry prone to periodic layoffs or reorganizations?
Nothing is more devastating than to buy a home only to be forced to take a salary cut, or to be laid off, a year later. If your current employment situation doesn’t feel stable then now might not be the best time to buy a home.
2. Do You Have 20% or more for a Down Payment? No matter the financial climate, it’s always wise to put down the standard 20% of the purchase price. A good sized down payment gives you a good chunk of equity in the home, and protects you from any economy swings.
3. Know Exactly How Much House You Need For Your Family. While it’s tempting to want the biggest house you see on the market, you never want to become house poor.
Never plan on spending more than 25% of your budget on the monthly mortage payment. You’ll want to have plenty of room left over for other items such as repairs, maintenance, and all those other little expenses that just tend to creep up when you own a home.
Always evaluate your financial situation closely before taking the plunge. If you’ve never owned a home before, consider talking to other homeowners in the neighborhood. They can help you get a good idea on the amount of money you should have set aside for upkeep.