Is it better to buy or rent a home? It won’t surprise you to hear that we believe home ownership is a good long-term investment for your lifestyle and financial well-being. But each person’s situation is unique. So we have put together a few key questions to ask yourself before you decide whether to step into home ownership.
5 Questions to Ask Yourself before Purchasing a Home
Are you in it for the long-haul?
If you are planning to make San Diego your long-term home, there are many benefits to owning. Historically, homes in San Diego increase in value over time. Establishing roots with home ownership will give you a sense of stability, pride and help you connect to the community in which you choose to live. Homeownership means privacy and the ability to create your dream house without worrying about landlord rules and deposits. On the flipside, if you are someone who doesn’t plan to live in San Diego long-term, you might want to think twice before buying. Each time you move, you will incur costs associated with closing, home inspections, moving, etc.
Have you gotten pre-qualified?
Regardless of what you think you can afford, you will need to get pre-qualified before you start looking. Remember, the mortgage payment is just part of the cost of owning a home. There are also property taxes and home insurance to consider. Going through this process prior to seriously shopping for a new home will give you a chance to get your documentation in order. You can catch any errors early, and this gives you an opportunity to identify any problem areas that need to be addressed.
Do you have a down payment?
You’ll need at least 5-10% of the purchase price to buy a home. Putting down 20% instead will save you the private mortgage insurance (PMI) costs.
Is your financial house in order?
As you’re saving for your down payment, you should also clean up your finances. Check your credit score to make sure there are no surprises there. Pay off your credit cards. Rework your budget to include the cost of a new home before you actually purchase it so you can prove to yourself that you can afford it.
Do you have a rainy day fund?
When you own a home you can’t call the landlord when the dishwasher breaks or the fence needs to be repaired. Be sure that in addition to your down payment and moving expenses, you’ve also saved enough to cover home maintenance costs that are often unexpected but are also unavoidable.
One final note – and this can’t be overstated. When you’re ready to search for a home, you want a qualified agent on your side to guide you through the process. Please feel free to contact us. We truly are best suited to help you find your dream home.