Buying Your first home is usually the biggest investment you will make in your life (well, unless of course you end up buying a bigger home, but still). It is certainly not a decision you should take lightly, which is why there are several things to consider before purchasing your first home.
Factors to Consider Before Purchasing a Home
- The Budget You Have to Work With- The number one factor that will play into figuring out the ideal time to purchase a home comes down to your current financial situation. What is your budget? How much do you have in savings? What do you have set aside for a mortgage payment? All of these are important things to consider before purchasing your first home.
- Expenses Involved in Home Buying- You aren't just going to need to factor into your budget how much you can afford towards a home, but you will also have to consider the costs associated with realtor fees, home inspector fees, home appraiser fees, as well as closing costs. These expenses can quickly add up and leave you behind on your original budget.
- The Real Estate Market- The real estate market can be extremely volatile. Sometimes you can get a house valued around $500,000 for a fraction of the cost; other times you may find yourself in a four-way bidding war because the market is on fire. Paying attention to the ebbs and flows of the real estate market, speaking with professionals in the industry about when the best time is to buy can save you hefty sums of money.
- The Time of Year- Believe it or not, supply and demand for homes varies with the seasons. The biggest months for home purchases are in between May and September. This is to avoid having to switch school districts mid-year if you have children in school. Because of these factors, prices of homes vary throughout the year as well. By taking advantage of less popular months to buy, you could land a better deal.
- Whether or Not You Are Prepared to Plant Your Roots Somewhere for Awhile- If you are purchasing your first home to live in, as opposed to purchasing it as an investment, it is important that you buy a home somewhere you can see yourself living for a decent period of time. The last thing you'd want is to close on a home only to decide shortly after that you didn't want to stay in the area.
At the end of the day, you are the only one who knows if home ownership is something you are ready for, both financially and physically. Home ownership is demanding. It takes a lot of work, diligence, and money to maintain. Think long and hard about whether or not you are ready to delve into the world of home ownership before beginning the process, but if you feel like you are ready for your first home, by all means, enjoy the journey!