Archive for buying a home in Elmira

Is Home Ownership Right for You?

 

Things to consider before making this big decision

Things to consider before making this big decision

 

Purchasing a home can be a big, scary decision. It means not only committing to a mortgage payment but to a town, a neighborhood, a particular place in the universe for (in all likelihood) a fairly long time. The financial commitment is no joke – it’s probably the biggest investment you will make. But the emotional commitment might be enough to put you off of a purchase for years as well. It’s not the kind of thing you jump into unprepared!

You need to get yourself ready in several ways before choosing to buy a home. You’ll need to have more than one area of your life under control before deciding that home ownership is for you. Your finances of course need to be in order and not just for the down payment. Your life needs to be in a certain place too. Canada Mortgage and Housing Corporation website has a thought-provoking worksheet to help you consider the pros and cons of homeownership (you can find the worksheet here). If you’ve decided that home ownership is your dream, here are a few ways to determine if that dream could be realized now or if it’s better left for a little later down the road.

Financial Considerations

Owning a home is typically a good move in terms of improving your personal finances. Your mortgage interest is deductible, you have real property that will increase in value, and your monthly payments are going towards an investment that is yours. Part of your mortgage payment goes to the principle, which is like putting those funds away for your future. Many people think that their mortgage payment and rent could or should be roughly the same, but that’s only a starting point.

Although you can do it with a lot less, a down payment of around 20% will secure financing at a reasonable interest rate. So saving up is of course a priority. If you haven’t been able to stash away enough for a down payment, then getting an affordable mortgage may not be possible. Saving up that kind of money takes concerted effort and time, especially if you are paying rent while trying to save. However, it’s essential to securing financing.

Saving won’t stop after you’ve purchased a home. You’ll also need to plan for the extra expenses that home ownership requires and which means your savings account needs a little padding. If you’ve been renting, you probably haven’t had to worry about taxes, repairs and maintenance. Your landlord has dealt with all those things for you but as a homeowner, this will become your responsibility.

A home has no sense of timing! If the roof springs a leak or the water heater goes kaput two weeks before Christmas and you haven’t finished your shopping, you still have to take care of these issues. Plan your price point so that you’ll still have a little leftover to save up for emergencies and yearly taxes.

If your finances are unstable or insufficient, there is help out there for you. Talk to your favorite banker or financial advisor about getting on track. There could be low or no-cost options in your town as well; ask your realtor for a referral. Look for financial counseling if you’re having trouble putting your money in the right places. You may have to make some adjustments to your lifestyle but when you move into your new home, you’ll know it was worthwhile.

Emotional Considerations

Choosing to buy a home certainly involves a great deal of financial planning but your emotional matters weigh heavily on the choice as well. You’re looking for a place where your life will unfold, not just a place to hang your hat. Make sure your mind and heart are ready for homeownership as well as your bank accounts. Ask yourself a few important questions.

Are you settled in your city, town or region?

If you aren’t sure you want or will be able to stay in your city or town for at least a few years, buying a home may not be wise. It takes a little time to build up equity in your investment. If you have to sell rather quickly it can affect you financially. Of course, you can’t account for sudden life changes like a job transfer or a death in the family but you can take an honest look at your life as it is right now.

Do you have the time and means to care for a home?

A home takes care and maintenance. From fixing a running toilet to mowing the lawn, all the little tasks will be up to you to manage. Ask yourself if you’re ready to manage these responsibilities and if you have the time to. If you are handy or if you’re willing to learn, you’ll need to make time to get the job done.

Is this what you really want right now?

Undeniably, this is a big step. It’s probably not the best idea to purchase a home just because someone else expects it of you, says that it’s what you need to do, or that you have to because “you’re married now.” Conversely, don’t let anyone else deter you by saying you’re too young or too old, inexperienced or single. This is your life and your dream! Make your plans, get your finances in order and find a good realtor if you’ve decided homeownership is right for you right now.