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5 Questions to Ask Before Considering Home Ownership

Survey data continues to show that the majority of Americans believe that buying a home is still one of the major financial priorities. The reasons for home ownership vary from wanting a safe and stable environment to building equity and having the freedom to choose where to live. Having a place you call home is critical, especially as you near retirement age. However, home ownership is not accessible to everyone.There are a few questions you need to ask before you consider homeownership.

Are You Committed to the Location?

Home is a feeling. That said, a lot of factors contribute to its ambiance. The location, for instance, determines your overall feeling towards the house. You should visit the neighborhood before you consider buying a home. Visit the parks, use the public amenities, and try the food. You might want to use a neighborhood expert in Barton Hills to create a complete picture, according to Spyglass Realty.

Consider the real estate market of the neighborhood too to gauge the value of your home in the future. Research on local development projects and their potential impact on the future value of your house. While at it, decide if the location saves you on your commute costs and if you are willing to live in that area for the 10, 15, 20 or more years.

What are Your Non-Negotiable Features?

Your home is where you will live for the rest of your life. As such, create a list of what you deem paramount in your ideal home before meeting your realtor. You may want a yard, a pool, an open floor house or 4 bedrooms. Be realistic about it, considering your price as you will never find a 100% perfect home. Based on your budget and this non-negotiable list, you may renovate to your liking after the buy. It may even be more convenient to buy an old home or fixer upper.

How Healthy are Your Finances?

Owning a home is an expensive affair. You require a 20% down payment on your mortgage to reap benefits, according to Zillow Group. The monthly installments may last for up to 30 years. However, the tricky part is getting approved for a mortgage. Your credit score has to be good and you might want to pay off our debts first. This will reduce the interest charged, lowering the cost of your mortgage. Banks essentially charge a higher interest to those with shaky credit histories. Factor in your monthly income to gauge your ability to pay off the mortgage.

Can You Handle the Associated Expenses?

Unlike renting, home ownership is a commitment that requires you to know a few more realtors. The fees associated with owning a house are huge, with maintenance costs being around 4% of your house’s worth annually. If you are not handy, this fee may double if you hire someone. Check if your home comes with homeowner association fees as they may amount to thousands. Factor in property taxes and the inconvenience of a commute to work or school. Nonetheless, having an emergency fund separate from your savings should serve you fine.

Are You Really Ready to Settle?

This is a vague question that is open to interpretation depending on a variety of factors. The ideal time to settle and buy a home may be at a managerial position in your company, after marriage, after your second child, or even right before retirement. However, your career in the next 7 years matters before buying. If you move around every two years, renting may be better.

In addition to that, consider your readiness to move into a specific neighborhood. Buyer’s remorse is real, with 44% of Americans experiencing it with their current home,  according to a CNBC article.

Bottom Line

Home ownership is a vital step in life and should be accorded the seriousness it deserves. Buying a home for the wrong reasons is expensive in the long run. Use the above questions as a determinant before you begin house hunting. Get your finances in order and have all the facts before you start the process.

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