How do you know if owning a home makes the best financial and personal sense for you and your family? Is it the right time for you to buy a home? Determining whether you want to own or rent a home depends on your personal preferences and your financial situation. Begin by asking yourself these questions:
Do I/we have a steady, reliable income? If you are thinking of changing jobs or if your job is insecure, now is not the time to buy a home.
How much total debt do I/we have (credit cards, car loans, students loans, etc.)? Is it manageable? If you are thinking of buying a car, if you can, put it off until you have bought your home.
Can I/we afford to pay a mortgage and other expenses, such as insurance and property taxes in addition to our current monthly expenses? Note that there may be other monthly expenses such as water/sewer, garbage collection, gas/electric, and pest control that you might not pay currently.
Do I/we have money saved for a down payment?
Do I/we have money saved for closing costs?
Do I/we plan to stay in the home for several years?
Do I/we want the responsibilities (and lifestyle changes) that go with being a homeowner?
If you answered yes to these questions, then the time is probably right for homeownership.
You don’t have the prohibitions of a landlord. For example, you can put nails in the wall to hang pictures or have a pet.
Your home is not just shelter, it’s an investment. As property values go up, your equity in the home increases.
The interest you pay on the mortgage and your real estate/property can be deducted from your federal income tax.
It may cost more to own than rent the same size dwelling.
Property values can go down as well as up.
You have to maintain the home and pay any maintenance and repair costs.
Moving to another home can be dependent on selling the current home.