Many people throughout the United States rent a living space as an alternative to purchasing a home. For many families, college students, and young professionals, paying rent to a landlord fits their lifestyle. Even though it still is a popular choice, only about 36 percent of all households are renters, as many people are turning to home ownership. In fact, millennials now make up the largest percentage of home buyers in the U.S., showing that younger generations might be tired of renting.
At one point or another, many renters come to a cross-roads: do you purchase a home or do you continue renting? It can be difficult to determine if you’re ready to make the leap into home ownership, especially for first time home buyers. If you are a renter, and you’re considering entering the housing market, here are some tips to help you determine if you’re ready!
Think About Your Long-term Goals
One of the first things to consider when entering the housing marketing is to think about your goals for the next few years. Many people will enter the housing market, purchase a home, and then realize that they need to relocate due to a job, financial situation, or family. However, staying in a home for as long as possible will offer you the best chance to have a return on investment. So, if you are expecting a change in the near future, this may not be the right time. Even though you cannot predict what the future will bring, thinking through your long-term goals can help save you some frustration in the future.
Evaluate Your Financial Situation
Next, take a deep dive into your finances. There are many costs associated with purchasing a home, such as the down payment, monthly mortgage payments, and property taxes. Determine how much of your savings you can dedicate to a down payment and how much of your monthly income you can comfortably dedicate to a mortgage payment while still paying for other bills, such as utilities, groceries, and child care.
To gain a better understanding of what your finances will look like if you are thinking about switching from renting to owning, Blackhawk Bank’s Mortgage Rent vs. Own Calculator will help you see the difference between renting and buying a home.
Think About Where You Want to Live
Additionally, think about where you want to live. Are you looking to buy in the neighborhood you reside in? Is there another neighborhood you wish to live in? Answering these questions can help you figure out which neighborhood might be the most affordable for you.
Once you determine where you would like to purchase your home and settle down, do some research and figure out what the cost of living would be in that specific area. What is the average price of houses? What are the property taxes like? Answering some questions about where you want to live will help you pinpoint a good price point for you in your home search.
Do You Want to Make the Leap?
In addition to the financial commitment that comes with buying a house, make sure you are emotionally ready as well. Maintaining a home takes time and effort; weekends are filled with projects and yard work, and there will always be unexpected repairs. Making the leap to home ownership is a big one, but it is well worth it in the end, as you will have a home to call your own and a sense of satisfaction knowing that all your work will pay off.
Here at Blackhawk Bank, our Mortgage Planners are ready to help you purchase a home you love, all with confidence and the knowledge to make the right decision. Click here to learn more about our Mortgage Planners or contact us today!