Questions to ask before deciding to buy a home
Owning a single-family home has become connected to a sense of social and financial success in our country, to the point that it’s often referred to as “the American Dream.” Owning a home can bring with it a sense of financial stability with the knowledge that you own a piece of property that will most likely gain value over time, build family wealth, and ensure that you and your family will always have a roof over your heads.
But homeownership may not the best option for everyone at any given time. Here are four questions to ask when you are deciding whether or not it’s the right option for you:
1. Are you able to save for a down payment or get access to down payment assistance programs?
Purchasing a home requires the ability to put forward enough money for a large down payment. This can be as low as 3.5% or as high as 20%, depending on the mortgage program you use. If you qualify for down payment assistance programs, they can provide some or all of this amount.
2. Can you afford a house you will like in a neighborhood where you would like to live?
If you think you will be in a better financial position in a year or two, it may make sense to wait. If you decide to purchase now, you might have to trade some of your wish-list items for more affordability.
3. Do you plan to be in the home at least 5 years?
Typically, in the first five years after buying a property, your mortgage payments are not building large amounts of equity in the house. If you move before 5-7 years of ownership, there is a greater chance that you will lose money when you sell. Do you need flexibility to move for your career? Owning a home may make moving cities for a better job much harder compared to renting.
4. Are you able to do maintenance tasks yourself, or can you afford to pay someone to do them?
There are some ownership options, such as townhomes and condominiums, where you pay an additional fee to cover some repairs and lawn care or other exterior maintenance. But if you don’t want to think about maintenance at all, renting may be a better option.
The Homeownership Advisors at NeighborWorks Home Partners are available to help you explore these questions, create a budget, understand and improve your credit, and find out what mortgage options and down payment programs may be available to you.
We recommend a personalized one-on-one advising appointment to begin your journey toward homeownership. We have helped thousands of Twin Cities homebuyers make these decisions, and are committed to assisting you every step of the way.
About the Author:
I believe that working to support access to affordable housing is the only way to address our history of housing discrimination and residential segregation. As the Storytelling VISTA, my primary role is to collect and promote the stories of the customers who NeighborWorks has assisted in the past as part of our outreach. I enjoy listening to music, playing guitar, and reading history in my spare time.