Some people can feel under quite a lot of pressure to buy their first home and house hunting can be a great deal of fun. But an article in aol.com points out it’s important not to get too swept up into the moment and to end up making a decision that you might regret, and has highlighted several warning signs to be aware of.
The first thing to think about is whether your employment is secure as generally getting a mortgage means locking yourself in for the next 15 or 30 years. Even if you decide to sell the home within the next few years, you still need to have a steady income that can pay the mortgage payments for this time. If you think your company employer may be making cutbacks soon then it could be worth waiting until you find something more secure or have been at the same job for several years and know you will have a predictable level of income.
The next thing to think about is the area you are buying in, as if you have any suspicions you might want to move away during the next few years then it may not be worth your while buying a home. Bear in mind that the costs associated with the house sale can take about 6% of the profit and that your home will need to rise in value by at least this much before you will break even. Even though renting may seem like throwing money down the drain, it could be more economical if you think you’ll need to sell in a year or two.
If you have a large amount of debt then you are unlikely to qualify for a mortgage anyway but this is also a sign that your financial affairs are not in good order. Instead of trying to purchase a home, work on improving your credit scores and paying down debt.
Buying a home brings about a multitude of additional costs that include a home inspection, closing costs, the cost of removals and quite possibly renovations and repairs to your new home. It’s important to budget for these additional costs. It’s worth adding up all these costs up and making sure your mortgage won’t just about clear you out, leaving you nothing to spend on these costs.
Sometimes renting a home can simply be more convenient. As a homeowner you have to deal with any little problems that come up such as faulty furnaces and leaky roofs. You need to be prepared to make these repairs yourself or to pay out for someone to do it for you.