Making the leap from being a renter to being a homeowner is a big one in the United States. It is a mark of passage for many. Some will rent their entire lives and have no issues with doing so. However, there seems to be a need to own property in many people, especially in the Dallas/Fort Worth area. Today, the real estate market in this area is starting to heat up. Mortgage rates are fantastically low. It is a great time to own a home. But, when do you make the decision to move from renting a home to owning your own?
One thing to consider in this decision is your current job situation. Having a stable income makes home ownership much easier and less of a drama. With a mortgage, you will need to keep up monthly payments of principal, interest and escrow. Plus, you will need to have money available for paying HOA or condo fees, doing repairs, performing maintenance, and making improvements on your home. If you cannot afford all of this on your current salary, then homeownership may not be the right decision for you.
Another consideration in making this decision is your lifestyle. If you are married with children, you may find that owning your own home gives you the privacy and elbow room you desire. However, if you are single without any children, you may find that homeownership is a bit much for you to take on. However, this is a personal decision. Many singles own their own homes quite happily. You will need to have time in your schedule for basic home maintenance. Renting removes the need for that time commitment.
Do you have any plans to change jobs or locations in the near future? Some people have a long term plan on their career development. It may involve going back to school for a degree or moving jobs to a new company. Keep this in mind when thinking about buying a home. Can you afford to keep the house during these transitions? Do you plan on living in the same area for more than a couple of years?
Homeownership has financial advantages and disadvantages. Those that own their own home are gaining equity in their property with each payment they make. Making regular payments builds a solid credit score. Taxes are deductible on income tax returns. A disadvantage though is the need to have a larger income to put into the house. With insurance, taxes, repairs and maintenance, the cost of homeownership is much larger than the central mortgage payment. Budgeting is easier with rent than with the cost of homeownership.
Making the choice to move from renting to owning a home is a personal one. Some people think just because their friends have done so, they should. But, the reality is that each person’s choices, financial situation, and future plans are unique. What works for one, may not be a good choice for another. Make this decision based on your situation, not on others.
Omni Chaparala works for DFW Realties, a DFW real estate company serving home buyers and sellers in the Dallas – Fort Worth metroplex.