There are a lot of things to consider when buying a home. Making a list of must-haves should be the first step in the home buying process, but what about those items beyond the “must-haves?” Once you’ve found a home you think you want to buy, there are still some things you should think twice about before closing. Buyer’s remorse is real, and many new homebuyers find themselves facing its effects, and you don’t want to be one of them.
Consider these 4 things before signing on the dotted line:
- Is the home too expensive for you? The amount you can qualify for and what you can actually afford can really be two different amounts. You constantly hear about people being “house poor,” meaning that they spend so much money on their mortgage every month that they have little money for anything else. If this is your first home, it’s important to think about the expenses you haven’t had to pay while renting that you may incur when purchasing a home. There may be sacrifices that you have to make as far as your budget goes. Are you prepared to make them? Don’t establish your home buying budget on what your lender says you can afford. Center it on what you honestly know you can afford and stick to it.
- Is the location right? A good location should be toward the top of your list of “must-haves.” However, a good location doesn’t necessary mean it’s the right location for you and your family. Do you want or need space to play? Does the location make sense for your work commute? Are the schools in the location good schools you want to send your children to? Do you want to be near stores and other conveniences or would you prefer to be closer to the suburbs? Are you part of an HOA, and are you okay with that? If you compromise on your location, give it serious thought.
- Are you purchasing the home with intent to sell or refinance it within a short period of time? This was how so many people got in trouble and upside down in their homes in the first place – buying homes they couldn’t necessarily afford after the short-term financing terms changed, and assuming they would be able to sell or refinance the house. If you are purchasing a home, and you’re not an investor or contractor, plan on purchasing a home you and your family could live comfortably in for at least 5 years.
- Are you unsure about your job security? While this economy can be unpredictable, and job security is becoming more and more a thing of the past, if you are trying to get into a home because you are concerned that an upcoming layoff might disqualify you for a home loan, maybe you should put off purchasing a new home until you are no longer concerned about an interruption of income. If you’re confident in your current career, can get work with another company easily, or have a large cushion of savings that could handle a temporary interruption of income, then proceed with the purchase. However, if you are seriously concerned about the short-term stability of your job, seriously consider whether purchasing a home is right for you.