Home prices are low, interest rates are low, mortgages are getting harder, but you’ve got a great credit history – sound familiar at all? There are many people who are looking at this scenario and deciding that now is the right time for them to buy. My questions is simple – is it really the right time for you to buy? More importantly, can you really afford to buy a home right now?
Lenders ask this question all the time – in fact, they based their lending policy on those factors. However, whether or not you can afford to pay a mortgage is not really the question – they question is whether or not you can afford a home.
Owning a home comes with a lot of added costs. You need to factor in costs such as maintenance, utilities, furniture, and perhaps even association fees. If you’re a couple and your mortgage is based on a joint wage, what is going to happen if one of you is forced out of work? You also need to live. Holidays, clothing and perhaps a new car should also be factored in to your calculations. There are a lot of couples that go without in order to buy a home – but think about it, it is a home so it should be enjoyed, not endured. If buying a home puts you into the latter category, then perhaps you’re not ready to buy.
I am not trying to scare you away from buying a home, rather, ensuring you have covered every factor in your home buying decision. There are a lot of calculators on the web, and most real estate agents have one, that can help you determine how much of a home you can buy, however, these calculators assume there is never going to be a change in your circumstances. History tells us that this is never true.
If you are buying a home to live in, if you have factored life into your home buying decision, and the answer is still yes – then welcome to the world of home ownership. If you are buying a home where your mortgage and financial situation needs to be endured, then think again, lower your sights, and perhaps wait a little – you may not be ready for home ownership. Home ownership may be an investment for life, however, it’s also the place for living and life.