Is Now a Good Time to Buy a Home?
Should You Buy a House Now?
Should You Buy a House Now?
Buying a home is a big decision. It’s not like purchasing a pair of shoes. If you change your mind 14 days after moving in, the lender won’t give you a refund. Once you start paying a home mortgage, the debt is there for a good few years. If you default on the repayments, the lender will foreclose and you will lose your home. On the other hand, once the mortgage is paid off, you own a pretty big asset, which has probably appreciated in value over the years. What’s not to like about that?
There comes a point in most people’s lives when they start thinking about whether now is a good time to jump on the property bandwagon. Right now, interest rates are very low, so home mortgages are more affordable than they were ten years ago. If you shop around, you should have no problem locking in a cheap deal where the repayments are less than the cost of renting an apartment. There are also other advantages to buying as opposed to renting a home.
The Perils of Renting a Home
Renting is an uncertain process. The property is not yours and you can’t personalize it to suit your own tastes. There is also very little security when you rent a property. The landlord has every right to terminate the agreement if he sees fit, which could leave you homeless with very little notice. This isn’t quite so bad if you have no responsibilities, but if you have kids, moving every two or three years is highly disruptive.
The Benefits of Buying
Buying a home gives you an opportunity to put down roots. As long as you keep paying the mortgage, you can stay as long as you like and one day, you will own the place outright. You can decorate and renovate as often as you like and nobody else has a say. So, if you want to paint the house Barbie pink, that’s your prerogative.
The Downside of Home Ownership
However, with freedom, comes a large measure of responsibility, and once you own a property, any maintenance costs come out of your pocket. These can soon add up. Can you afford to fix the roof if a hole appears after a bad storm and what happens if the hot water boiler breaks down and needs replacing? Would you have enough money to pay the bill, as well as covering the cost of the mortgage?
Affordability is an important consideration. Yes, buying a home is a smart investment, but only if you can afford the cost of ownership. Most mortgages are spread out over 25 years. If you have a reasonably secure job with prospects, this won’t be a problem, but if your job is sketchy and your income uncertain, no lender will touch you.
Don’t rush into buying a home. Sit down and work out a budget. Consider whether you can afford the mortgage payments and work out how much you need for a down payment. Don’t forget also that there are costs associated with buying a property, so factor these in from the outset.
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