Most of us were brought up to believe that owning a home is much better than renting and sometimes this is a true statement. However, many people overlook all of the additional costs and responsibilities that come with home ownership. Potential buyers can forget that there’s usually a hefty down payment involved with purchasing…and that’s just the start of it. What about homeowners insurance, property taxes, maintenance, HOA fees, etc?
Once you own the home, the days of calling the landlord to fix something are over!…Welcome to home ownership. You are now officially responsible for anything and everything that can go wrong with your house. From a malfunctioning water heater to a broken garbage disposal, these things are now your problem. Hopefully the house you bought isn’t that old so that you have a while before having to replace the roof or the central AC unit. [I just replaced my Central AC last week to the tune of $4,300.00]
Don’t get me wrong , I’m not trying to scare you from wanting to buy a home. After all, I ‘m an Orlando real estate agent that makes a living from buying and selling houses. However, I don’t like to see people get into a situation without realizing exactly what they’re getting into. That to me is more important than making a quick commission.
Here are some things to think about to help you determine if you can really afford to buy a home.
1- Figure out how big [or small] of a home will work for you and what neighborhood you’d like to live in and how much it will cost. Your Orlando Realtor will be happy to provide this information for you by giving you a list of homes for sale that meet your criteria.
2- Speak to a lender or mortgage broker to see how much of a mortgage you can afford. Find out what different loan types you qualify for and compare interest rates, down payment requirements, etc. A good mortgage broker will be able to give you a breakdown of all the costs involved with a home purchase including the closing costs, points to the lender, taxes, recording fees, inspections, title insurance, etc.
Once you’ve figured out how much of a mortgage you can realistically afford, compare that to the list of homes provided by your real estate agent. If the numbers don’t match, you may have to adjust your criteria.
3- Don’t forget moving expenses. Whether you hire a professional moving company or you decide to rent a truck and do it yourself, it’s going to cost you some money. The more things you have, the more money it will cost you.
4- Budget for the unexpected. Actually you CAN expect things to breakdown because they will…it’s just a matter of when. Make sure that you’re able to set some money aside for these repairs, especially if you buy an older home. As an Orlando real estate investor I’m pretty familiar with spending money on home repairs. The most expensive repairs that you will be faced with will be replacing the roof, the AC, electrical system, plumbing system and foundation problems. If you do decide to purchase, have these items inspected before purchasing.
5- Job security. Buying a home means that you’re signing up to be responsible for that mortgage payment for the next fifteen to thirty years [probably 30]. Make sure that you’re choosing a home and an area where you can see yourself living there for many years to come. Even if you were to lose your job. Are you in an area where you can easily find other employment.
This is one of thee reasons that renting is so popular with the younger generations. The commitment is minimal, you don’t have to worry about selling, you don’t have to worry about getting foreclosed on, and if you want to move for a better job or any other reason, you can just get up and go.
No one enjoys asking themselves some of these questions but when you’re considering such a big commitment, you must. Owning a home is serious business and the last thing you want is to set yourself up for failure.