Should You Buy a House?
Whether it’s friends, family, or colleagues, it seems like everyone these days wants to buy a house. The issue about this topic is that buying a home should be based on whether or not it it suits your personal financial goals and aspirations, as opposed to just buying a house because everyone else is doing so. I’ve assembled some pros and cons to buying a house – use it as a checklist to see if buying a home is right for you:
- A home of your own: Buying a house is essentially making a house a home. You can finally get out of the grind of paying rent every month and you know that you own the home (at least once your mortgage is paid off).
- You don’t need to buy it in cash: The staggering prices of homes today means that most of us cannot afford to buy a house in cash. There are many different types of home loans available, but it usually comes down to a 15 years or a 30 years mortgage.
- You can use a house as an investment: Most people would love to be property developers. One way to do this is applying for a mortgage to buy a house and flipping it for a profit to make extra market. There is no guaranty that you’ll make money but it is a very popular avenue for people who are tempted by rising house prices and low barriers to entry.
- Building equity: While it’s no longer the case to assume that everybody builds equity in their house, it’s relatively safe to say that you SHOULD build some equity when you buy a home. We’ve built up quite a bit of equity since we bought our home 3 years ago and the cash will help go towards the down payment of our next house!
- Your credit has to be superb: The thing to remember about buying a house is that your credit has to be excellent. You have to try and repair it if it is not good or it should already be in good condition because lenders want to know that you are serious about meeting your mortgage obligations each month.
- You have to be committed: If you are someone who is unsure where to place your money, it might not be a good idea to buy a home because you have to see a house as a long term investment.
- It could be a money vacuum: Houses are expensive and a lot of people jump into them without realizing what they’re getting into. In addition to the mortgage there are bills/expenses like property tax, insurance, maintenance, large repairs, and home owners association dues. Be careful not to get trapped into something you can’t afford.
Buying a home can be a great thing if it’s done by the right person, in the right situation. Try to avoid keeping up with the Joneses and focus on making the best decision for your and your family.
Picture by FreeDigitalPhotos
Disclaimer and Stuff
The articles are written by personal finance enthusiasts (not certified professionals) based on their personal experience. What works for them may or may not work for you, and you should always consult a financial advisor before making important financial decisions.
In accordance with FTC guidelines, we disclose that we have a financial relationship with companies mentioned in this website. This may include receiving access to free products and services for product and service reviews and giveaways.
Any references to third party products, rates, or websites are subject to change without notice. We do our best to maintain current information, but due to the rapidly changing environment, some information may have changed since it was published. Please do the appropriate research before participating in any third party offers.