I should start this off by saying that I’m in no way at the point in life to buy a house – not financially and not geographically. After moving out of my hometown of Ohio to New York City and then San Francisco, I’ve accepted years ago that I’ll likely never be able to own a home – both cities commanding mortgage prices from half a million and up.
…but that doesn’t stop me from dreaming. Here’s the thing. I’m a Pinterest and HGTV obsessed creative type who loves to purchase and decorate the dream home that lives in my brain. Let me tell you, this place is incredible. Huge bay windows with light pouring into every room, an awesome little nook full of pillows and blankets where I can read, a cute wooden desk that I can use when I’m writing. And, of course, a very cool den for my fiance and I to watch football in (and wonder how a Bengals fan and Jets fan can really make it work ).
I digress. What’s the point? The point is that many renters have similar dreams of homeownership – but are actually more willing to do what it takes to make that happen. So let’s say you’re one of those people and not just a daydreamer like me. How do you know it’s the right time to buy a home and what should you think about in the process? I’ve decided to make some good use of the hours of time I lose to watching shows like Property Brothers, House Hunters, and Love It Or List It to dole out some tips:
Set a Budget
No, not the kind of budget that you’re going to set and quickly go over. A budget you will actually stick to. Bible Money Matters recently wrote a blogpost about the “just enough principal” and using this to buy only the home you need and not the biggest home you can get. Use the “just enough principal” so you don’t become house-poor. When you’re thinking of a budget you can stick to, remember that it should be broken down into a mortgage payment (including taxes) and closing costs that you can afford comfortably each month, plus all of the other costs you normally have each month. And remember, things like your utility bills and even grocery costs (think cleaning supplies and more rooms to furnish) are going to go up once you’re a homeowner. Plan ahead for these cost increases by implementing them in your budget.
Create an Emergency Fund
Speaking of extra costs, there are a ton that can come up in homeownership. Regardless of the age of your house, you will be susceptible to repairs and maybe even things like weather damage. Don’t put yourself in a situation where a new furnace would have to go on a credit card. Best to not purchase a home until you have a solid chunk of money set aside just for housing emergencies (and preferably another one set aside for living expenses in case you find yourself out of work, even temporarily).
List Your Priorities
Let’s just go ahead and assume that your budget won’t cover all of your wants and needs. Before you start searching for a home, make a list of your desires and prioritize them. Would you rather have more space or a fully renovated home? How long are you willing to commute to work? Do you prefer living in the city or in the suburbs? Are you handy enough/have enough time to repair a fixer-upper? Do you really need the things you want or are you just used to hearing everyone say that you should have it. Not only should you make this list, but you should be brutally honest with yourself about why you are prioritizing it the way you are. That way you know you will end up with a home that will make you happy.
Do Your Research
Now that you have a budget you’ll stick to, money set aside for emergencies, and a solid list of priorities, it’s time to do your research. Where can you feasibly get the things you want? It may not be in your neighborhood of choice. If that’s a dealbreaker for you, then it’s time to readjust that list of priorities. Remember that this whole process is a learning process and you’ll quickly realize what’s most important to you. Just be sure to stay true to what you want and not what you think you should have. Start off by researching the prices of homes that look like what you want and are in your neighborhood(s) of choice and go from there.
Buying a home is a huge responsibility and one that’s not easy to get out of once you’ve signed on the dotted line. This could take a long time but what’s a few months or even a year compared to a 30-year mortgage? Take your time and make sure you find a home you love, that you’ll want even years from now, and that is safe.
I may not be anywhere near buying a home of my own at this point, but it still rings true that homeownership is a huge part of the American dream. If you go through all the necessary steps to make this happen and are prepared for the worst case scenarios, then you can accomplish your dream.
Image Credit: hyku