Things To Consider
Buying a home is one of the best purchases a person can make in their lifetime and is a goal among most people in the world. However, there are some instances where buying a home is not a suitable choice for a person at a particular point of time. One of the best financial investments that a person can make, home ownership can also be a fiscal drain and therefore a prospective homebuyer should take some time to consider a variety of issues in deciding whether they are in an appropriate situation to buy a home. Although rare, there are certain things that people should consider that will make them realize that it may be in their best interest to delay the purchase of a home.
Benefits To Owning A Home
Before discussing what should you consider when deciding whether or not you should delay purchasing a home, it is important to discuss the benefits to owning a home. Homeownership is a goal that most individuals want to achieve and if you could think back to when you were a child dreaming about your future, usually one of the things you dreamt of owning was a home. Although a considerable financial investment in the short-term, owning a home is one of the best things you can spend your money on. As shelter is one of the few basic human needs, the real estate industry is a consistently growing one. By buying a home, you are virtually guaranteed of being able to sell it at a later time for a price higher than you paid for it.
Besides these economic advantages to homeownership, there are also personal gains to owning a home. For those individuals who have never owned a home before, you will undoubtedly understand the frustration of using considerable resources to make a rented property feel like home only to be unable to shake the feeling that these changes will have to be reversed once you move out. By owning a home, you will be able to enjoy a living space that will be yours for many years. The way you decorate your home is just as important as the home that you decide to buy in making a statement about who you are. Also, just think about the prospect of handing over the home you bought to your children later on in life. This is only possible when you own a home.
What To Consider
However, as previously mentioned, there are some issues that you should consider before buying a home. The process of buying a home is not an easy one and there should be some serious thought put into it. Homeownership requires a considerable amount of upfront capital and consequently you should consider whether you have the financial means to afford buying a home. Also, owning a home will provide you with the freedom of escaping the vicious cycle of rent (paying monthly payments to live in a place that you won't own). However, homeownership takes away the freedom of mobility that renting provides. You should take a serious look at where you are at your life and contemplate over whether or not you are ready to center in one location for a significant period of time.
For prospective homebuyers who already own a home but are in the midst of selling their home in order to upgrade to a better home, it is recommended that you sell your home before buying a new one. Although the order in which you arrange these property transactions may seem irrelevant, in fact selling your home first will make it much easier to buy a home. This is because these homebuyers should consider their financial situation. By selling their home before committing to buying a new home, these homebuyers will eliminate the financial risk of buying a home. Even though most homeowners are attracted to the lure of open houses and shopping for a new home, by selling their home before buying a home, these homeowners will avoid the frustration of raising enough funds for a down payment. Additionally, by selling their home before buying a new home, these homeowners will not have to worry about arranging for interim financing.
Example
For individuals who are looking to buy a home in a new part of the country, the biggest issue that they have to face is whether or not they will like their new neighborhood. Take the case of Marcus, a forty-four year old mechanic who had recently broke up with girlfriend of eight years. Wanting to make a break from his past, Marcus decided the best way to start fresh in his life was to move from his Baltimore home to another part of the country. Always attracted to the West Coast ideal of life, Marcus soon made plans to move to Sacramento.
He made this decision after finding a two-storey, two bedroom home with a large basement and garage that would be conducive for his goal of starting up a business fixing motorcycles. After acquiring the necessary financing, Marcus soon moved to his new home. Initially happy about the Californian lifestyle, Marcus found after a couple of months that he was attracted to life in the Pacific Northwest. His motorcycle fixing business was going slow and he was trapped with large mortgage payments. Worst of all, he had grown tired of the Californian way of life and became bitter about how owning a home had trapped him in this situation.
Marcus' predicament could have been avoided if he had taken the first step of living in Sacrament for a couple of months by renting an apartment before buying a home. As homeownership is a considerable investment both financially and personally, it is important that you do not rush into this decision. Therefore, if you are moving to a new area or region of the country, it is recommended that you spend a couple of months renting in this area. By delaying the purchase of a home in order to become familiar with a new part of the country, you will often find that you will make a better decision about where to buy a home than you would have if you had bought a home when you first moved there.
Location
The importance of being familiar and comfortable in the neighborhood where your home is located should never be underestimated. Although you can look at homeownership as a fantastic economic plan, it is more important to look at your home as the place where you will be living for a number of years. By taking some time exploring what amenities are close to your home, the type of neighborhood your home is located in, and whether your home's location will meet your social needs, you will be guaranteeing yourself future happiness about your home purchase.
Financial Issues
Another issue that you should consider before purchasing a home is whether or not you are financially able to handle the fiscal burdens of homeownership. Although the initial investment that you are responsible for in buying a home consists of the down payment and the closing costs, you should understand that homeownership generally requires many months of mortgage payments. In addition to these expenses, there are other costs such as homeownership fees, property taxes, and utility costs that you will be responsible for. Consequently, it is important that before you buy a home that you analyze where you are in your professional life. Although this is often difficult to project, it is important that you assess your job future. If you are currently facing an uncertain job future, such as if your employer is facing the possibility of financial trouble, it is in your best interest to delay the purchase of a home.
The worst thing that could happen is that after you buy a home, you lose your job. Financial difficulty will cause a great degree of stress to homeowners who are confronted with monthly payments. If you were to lose your job after you have bought a home and have missed three mortgage payments, you will face the terrible prospect of losing your home through foreclosure. Foreclosure refers to a process in which a homeowner loses their interests in their home to their mortgage loan source as a way for the mortgage loan source to recover money lost in their investment.
Additionally, by buying a home while facing an uncertain job future, you will be doing yourself no favors in trying to find another job. Homeownership will provide an anchor that will limit your job opportunities, as you will be unable to travel to other parts of the country to live and work. Therefore, do not add further possible stress to yourself if you are facing an uncertain job future by buying a home. It would be better for you to delay purchasing a home until another time where your job future is in a much better situation.
Personal Issues
Another issue that prospective homeowners should analyze before buying a home is their personal life. Homeownership requires a great deal of responsibility that is rewarding but will limit many opportunities for you both socially and financially. For example, one of the saddest trends that real estate agents have seen has been married couples buying homes during a time when their relationship is in turmoil. These actions on behalf of these married couples are understandable. Married life is a difficult thing to understand and sources of conflict can be traced back to a million other things.
For many married couples who are encountering marital problems while looking for a home to buy, they often feel that buying a home will resolve their problems. Whether it is because they feel that looking for a home has been the source of stress or whether that owning a home will produce a stable solution to their problems, married couples with marital problems often go against their better judgment and buy a home together.
Buying a home while facing marital problems, however, is not a good solution to marital problems. If anything, the presence of an owned home can make thins worse. For example, if these marital problems escalate to a divorce or separation, the selling of a home before the home's value has appreciated will create extra financial burdens to a difficult situation. Therefore, if you are facing marital problems while looking for a home, consider whether or not this investment is the right choice for you at this point in time.
