Many renters dream of homeownership, but determining if the timing is right can be a significant challenge. If you're thinking non-stop about being able to paint the walls any color you want in a space that is building wealth over time, there are a few factors to consider first.
You plan to stay in one place more than 5 years.
Think back on your rental history. If you are looking to spend years in the same location, or you have already rented in a destination you love for an extended period of time, then homeownership is a great option. This is a major win if you are working in a secure job in that location as well.
Renting, on the other hand, provides the flexibility to move anywhere you want after your lease is up if you aren't sold on the area. Keep factors like your commute time and school district in mind when signing up to stay in one spot for the foreseeable future.
You understand your monthly budget and are prepared for extra costs.
A home can be affordable to anyone with the right budgeting, but it's important to know all of the costs and start planning early. When it is time to sit down with a loan officer to figure out which mortgage is best to you, you should have your monthly budget already accounted for on a spreadsheet that they can see.
Often, first time buyers are approved for more money than they can afford if they can't show all of the monthly bills coming out of their paycheck. Fortunately, Metro Brokers Financial can analyze your budget and help you find out what a healthy mortgage will really look like for your needs. Check out our blog on Mortgage 101 here for more information on that process.
You're ready to build equity.
Equity is the amount of your home that you actually own, after the cost of your debt. Through home improvements and routine maintenance, you can improve your property's value which will increase your equity over time even more.
While renting is convenient, you are not spending money on something that will give you a return on your value over time. The time is right to buy when you are in a secure place to plan ahead, steadily pump money into your mortgage, and develop a long-term strategy for creating wealth.
You'll save more money buying in your area than renting.
This factor shouldn't be the strongest when determining when to buy, but if you are losing money while renting and could save money by purchasing a home, then homeownership is a good option. Eventually, even though you bought the home to live in yourself, you may even decide to rent it out to others and use the monthly income to upgrade.
You want the stability.
Home ownership requires long-term commitment, but it also provides stability. When looking for a new home, evaluate the ways your life could change in the next few years and look to buy a space that can evolve with you and your family. The goal is to move in to a house that can gives stability at every step of your journey.
If you have checked off all these boxes, it's time to start looking for your dream home! Visit our buying guide here to find out more about the pre-approval process and set up a consultation with one of our first time home-buying experts!