Keeping Emotion Out Of Your Decision To Buy A Home
Posted on: 25 March 2018
Buying a home is a serious venture; probably the biggest purchase you'll ever make. It's also a long-term commitment, a lot like a marriage. Your choice will stay with you for a long time to come; probably fifteen to twenty years. It's therefore important that you get into it with a sober mind; and not on the basis of emotions or whims. So here are a few guidelines to help you make a sober decision.
Do you Need to Buy?
Before you even settle on buying a home, ask yourself whether you need to buy one. Don't buy because of peer pressure or because it's trendy. Renting may be better for you now, especially if you are in an unstable job or living situation.
Attend Open Houses
Once you've decided on buying, attend as many open houses as possible before you are ready to buy. This will helps you to decide on what you must have and what you can do without. It will also give you a realistic picture of the prices.
Consider the State of Your Finances
Can you afford to buy a home? Consider the mortgage rates, your credit score, and your debt.
A poor credit rating will increase your down payment and mortgage rates. You may be better off building your credit score and clearing your debt before embarking on homeownership. Build up your savings; at least 20% of the price of the home; even if you won't use all of it. You want to have a little extra something, just in case.
Set a Price Limit
Put a cap on what you are willing to spend, and the amount of money you can comfortably pay every month. Do a thorough budget of all your monthly expenses. Consider all factors including property taxes, home insurance, utilities, etc. Remember that the interest rate may rise over time. How much do you have left for a mortgage payment? Is it adequate? Do not go beyond the limit you've set for your mortgage.
Don't be blinded by Love
No matter how a much you think you love a home, don't let it blind you to other factors such as price and flaws. Conduct your due diligence as you normally would. A real estate appraiser is invaluable for getting a neutral opinion on the value of a home. If the home doesn't make the cut, move on. There will always be another home. You'll fall in love again.
If you want your home ownership journey to be successful and pain-free, focus on the financial aspects more than emotions. Consider your current needs, your credit score, mortgage rates and your budget.
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