Everyone dreams of having their own place. A home, by conventional standards, remains to be the ultimate measure of success and an indicator that one has “finally made it far.” This aspirational draw of a new home is a double-edged sword, though. At best, it compels people to work harder in life. At worst, it makes people lose touch with reality. Too high of expectations, too engrossed with the ‘dream home’. This bad scenario is what you want to avoid. Otherwise, you’d end up in home buyer’s remorse pit. That said, before buying a home, make sure to ask these 3 reality-check questions to yourself:
Can I afford to buy a home?
Of course, this should be at the top of the list. This is a huge investment you’re making, so it’s just proper to do some reality checks on your finances. Plus, the budget would tame all your high expectations and ideals in shopping. Take inventory of all your sources of income. Next, add up your non-home-buying-related expenses.
When you deduct these expenses from your income, that would leave you with the amount that would cover the home-buying costs. The rule of thumb is your mortgage payment should be no more than 25% of that amount on a 15-year fixed-rate mortgage. Do note that this is just a general principle. The best way to know much you can afford, based on your income, debts, and whatnot, is to consult financial experts in a mortgage company. Tempe agents can help you with this process.
What’s my dream home?
If your concept of a dream home consists of two gyms, a library, a wine cellar, an indoor pool, and theater rooms for each of the four floors of your future property, throw that idea away (unless you have the money for that luxury). If your dream home is one that may or may not have a wine cellar, but definitely has all your must-haves, then keep it.
Remember, you’re only moving at the budget you’ve drawn up. Don’t make the mistake of justifying the purchase of a home that lacks your must-haves but teems with nice-to-haves. Otherwise, you’ll realize sooner or later that you’re in some serious money trouble, paying more for mortgage and cashing out for the renovations on the must-haves. When you list down the things your dream home has, filter them out if each item is a need or a want. Prioritize the former when house hunting.
Does homeownership fit in my future?
People looking to buy a home should be able to see themselves staying in the place for at least the next five years. What’s the wisdom behind that? Well, by the time you reach your fifth year of homeownership and say, you decide to sell the home, the land and property have already appreciated in value that you’ll be able to get back some of your purchase costs.
If you don’t see yourself staying put in the future — for instance, when your job requires you to move from one state to another, then it might be a wise move to postpone homeownership. If you’re in this for the long haul, then go shop for home loans already. Ask for different quotes to find the best deal in the market.
A home is the ultimate aspiration of many people. When you’re at the actual home buying process, don’t be so high up in the clouds that you ignore warning signs on your finances, your future, and the properties you’re looking at. Have some reality check before going house hunting.