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How Do You Know If you Are Ready to Own A Home?
How do you know when you're ready to own a home?
Home ownership has a lot of benefits. You will have a place to call your very own. You will have
more stability. You can do what you want with your home. You can take advantage of tax benefits.
You can build equity. And hopefully, when you decide to move you can recoup the cost and with any
luck be able to make a profit.
But don't kid yourself. Home ownership comes with a slew responsibilities and downright headaches
as well. You will be responsible for all upkeep and repairs. You may have long term relationships
with your neighbor – good or bad.
So before going any further, consider whether your lifestyle and finances make home buying a smart
move.
Transaction costs mean you should plan to stay. Except in a roaring real estate market, it usually
doesn't make sense to buy a home you'll own for less than three or four years. That is because of
the transaction cost of buying and selling property which could result in losing money on the deal. If
you do make money, you'll pay capital gains taxes if you're in the house less than two years.
When home prices are falling, it just makes the case even stronger. So ask yourself if you can really
stay put for that long. Will you need to move because you are transferred by your current employer
or a new one? Are you thinking of going back to school?
It may make more sense to rent - On the financial side, one key question is whether it costs more,
on average, to rent or own in your area. The rule of thumb is that if you pay 35 percent less in rent
than you would for owning - including the monthly mortgage, property taxes, and any homeowner's
fees - then it's smarter to continue renting.
Only if all those answers still point towards owning should you proceed to the next step - getting the
money right.
If you have any questions about home ownership and how to get started, give me a call. I am glad to help.
Pamela Edwards, realtor
Ebby Halliday Realtors
(469)877-5631
[email protected]