Conventional wisdom suggests that you should purchase a home as soon as you can financially afford to do so – after all, real estate tends to be a strong, stable investment. But we recognize that buying a home doesn’t make sense for all people, and we encourage all of our clients to consider the following:
- How long do you plan on living in the home? Unless you’re paying for your home in cash, it typically doesn’t make sense to buy if you’ll be moving within five years. This is because closing costs (things such as title insurance, mortgage-related fees, and transfer tax) can really add up – plus, nearly all of your monthly payment will be going towards interest for the first few years.
- Do you have savings set aside for home improvements, and are you comfortable with home maintenance? Ahh, the joys of home ownership! Whether it’s a leaky roof, a broken hot water heater, or finnicky bathroom plumbing, you’ll be responsible for footing the bill – or repairing it yourself! Of course, these things can really add up, so we advise our brand new homeowners to have at least $5,000 in a “just in case” fund.
- What can you afford? Generally speaking, the average mortgage payment is higher than the average rental price in Greater Philadelphia – but that isn’t the case everywhere! Consider your own needs, your standard of living, and your “all-in” monthly budget. EveryHome’s Closing Cost Calculator will estimate your real estate taxes, homeowners’ association fees (if applicable) and homeowners’ insurance to give you the best sense of what you can expect to pay each month.