Many people prefer buying over renting when it comes to choosing a place to live. There are many positives that are associated with buying a condo or house. Purchasing a home should be viewed as an investment so it is important to think about the money aspect when choosing to buy versus rent. There is generally more money involved in purchasing a property. But you will get a lot of money back from your investment if you choose to sell the property. Before you buy, think about expenses involved and figure out if you have a large enough savings account and a good enough credit score to cover expenses. Be realistic. You need to have enough money for a down payment, renovations, monthly mortgage payments and any miscellaneous expenses that come up. If you have a good credit score it can be very easy to get a loan to help with expenses but you need to make payments on the loan so make sure that you can afford that as well.
Money Management International recently published a list of 5 signs you’re ready to buy. These signs are:
- You are pretty well settled
- Your income feels secure
- You have money saved
- You have a clear understanding of what you can afford
- You feel ready for the responsibility
It is important to feel settled in your location and in your career before purchasing a home. This is because if you choose to leave the area or if your income changes, you have to keep making payments on the home until you sell it. It is also important to have money saved in a “rainy day” account for any unexpected expenses that come up or if your career changes in any way.
Being a homeowner is a big responsibility but it is very rewarding. It is an adventure that is bound to have unexpected expenses. If you are interested in purchasing a home, check out home prices in the area and keep an eye on property value fluctuations. If you like what you see, have a conversation with your bank about loan options. Only you can decide if buying is the best option for you.