September 22, 2013

Renting vs. buying a home is a HUGE decision. What questions should be answered BEFORE you buy?

6 thoughts on “September 22, 2013”

  1. Macala says:

    One of the biggest questions you need to ask yourself is if you are “ready” to buy a home. If you aren’t quite ready, it is a much better decision to keep saving for a downpayment than to buy a house when you aren’t financially ready. When thinking about the down payment, you should ask yourself if you have save 20% of the price of the home. Having a large DP will help you avoid PMI. One should think, have I paid off all other debt? Other questions that should be asked are: is my credit score high enough and do I have any intentions to move in the next 5 years (if yes, than DO NOT BUY A HOUSE).

  2. Mike Finley says:

    Outstanding, Macala! Here are a few more things to consider.

    How strong is my relationship? Buying a home is a stressful experience. It will strain ANY relationship. DO NOT buy a home hoping it will bring you closer together. That’s not how it works.

    Will your savings be totally drained if you buy? There will be multiple costs as you move it and get settled into your new home. There will be problems you did not expect. These things WILL cost money and if you don’t have it, it will go on the credit card. DO NOT go into a home with no savings. It is a recipe for disaster.

    Follow Macala’s advice and prepare, prepare, prepare BEFORE buying a home. DO NOT let anyone rush you and that means you keep renting until you are ready financially and psychologically. This will be one of the biggest financial decisions of your life. Proceed with care and due diligence.

  3. Alex Christianson says:

    It all depends on your situation in life. If you are happy in your life with renting a home, and that is the more financially safe option for you, then why would you buy a home? If you really feel like owning your own home, sleep on the decision, sure as heck don’t rush the largest debt most people ever occur! Some things to think about is if you are going to have more people living in the same space for lengthily periods of time. For example if you intend on having children with a special someone, it may be a good idea to get firmly planted in a new home first to make a great “nesting” ground for the new younglings to come enjoy the world in a spacious environment that is truly your own. Some other questions to answer are: “Will the home be in a convenient location for work, school, groceries, and other goods and services that we need?”, “Do we have enough saved for the down-payment of at least 20%? Will the subsequent payments not be too much of a blow for our incomes to live comfortably?” “Is this a safe neighborhood? Must I worry about drive by shootings, thefts, other illicit activities occurring on nearby streets?”. “Will the bank or other financial institutions offer us a loan large enough?(Hint: check the credit scores)” There are of course many other questions that can be asked and thought that can be infused in this decision making process. However, I think that I got the most important ones asked.

    Question for Mike Finley: When are these questions posted on this website? I wish to know so that I can be one of the early birds to catch the worm 😉 also so I don’t have to develop some OCD. hahaha

  4. Mike Finley says:

    You made many fine points, Alex. Great job. You can find previous questions under the archives on the far right part of this website. Simply hit on each month and you will see a list of questions. Hit on the question and you will see the answers. Welcome aboard!

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