4 Questions: Are you ready to become a home owner?

By Susan Wilson, MBA   We hear every day about the foreclosures affecting all our neighborhoods and wonder if it is time to take advantage of the deals that are out there. After all, the American Dream is to own a home, why not live the dream? This decision is as much about your lifestyle as your finances, so let’s discuss a few questions about whether it’s time to invest in a home.

Are you settled in the location where you plan to stay?    Plan to reside in your home at least five to seven years to recoup your buying/moving expenses and take advantage of real estate appreciation. Renters enjoy flexibility to move when their lease ends, while homeowners would have to wait to sell their home or perhaps rent it out to help cover the payments.   Have you found your life partner?   82% of home owners are married couples. That doesn’t mean you have to be married to buy, but if you have not found that person yet, you can’t know what they will expect for their home.     Are you under 35?   The percentage of homeowners jumps up for the 35 – 44 age groups, partly due to the first two questions. Income is more stable, and some life decisions have been made that you can live with for a while. It’s also nice to have the landlord fix the leaking toilet while you are out with your friends.     Speaking of leaking toilets, do you like home maintenance? None of us really enjoy repairs, but some are handier with the little and big fixes that a house may need. If you are not Mr. or Ms. Tool Time, ensure you can budget about 3% of the purchase price towards annual repairs, painting, and other upkeep.

Reflect on your answers.

Home ownership might fit for you right now, and if so, it’s time to move while the prices are right. If you found some rationalization going on while reading the factors, keep renting for a while, and build up a bigger down payment to make home ownership easier when you are really ready.