Owning a Home | Are You Ready to Buy a Home
Kevin and I recently bought a home. It is a home that we love, and the story of how we got the home is down right jaw dropping (a story for another day), but as with any home it is in need of a little TLC. The things that need tending to are things that might not bother everyone, but to two people that are in and around the construction industry they are things that stick out like a sore thumb (especially when you have little to no furniture).
We knew that we wanted to buy a home as opposed to renting. Kevin had own a townhome when we first met, which we sold in 2017, and in between buying our home and selling the townhome we lived with Kevin's father (another story for another day). So, how did we know we were ready to buy a home and not rent? Let me start by saying that I know home ownership is not everyone's dream, and that’s okay. For us we just knew home ownership was something that we wanted. There are definitely pros and cons to each, it just depends on your lifestyle and desires. If owning a home is something you're interested in definitely keep reading to uncover if you are ready to buy a home!
Do you even want to buy a home?
This is probably the best place to start, ask yourself the question, "Do I even want to own a home?'
One of the reasons that we knew we wanted to buy a home was because we knew we could get a better bang for our buck than if we rented. Meaning, we could find a place with more space and for far less money than if we rented a house or apartment somewhere in the metro Atlanta area. We also chose a more rural/suburb area in Georgia because again, we knew we could get more house for less money. Plus, Kevin and I were expecting our first child and we knew we wanted room to grow and be able to house the people that would undoubtedly be coming to visit us and the baby.
There are a lot of other things that you should probably should consider before you start down the path of home ownership. There are a lot of conveniences when it comes to renting. You don't have to worry about the maintenance, you can just call someone to fix it. And there's a lot of stuff falls under that umbrella of maintenance ,such as;
Heating and Cooling
Essentially, EVERYTHING. If you're ready to take on all that and more, go for it! But, you should figure those sorts of expenses in when you're figuring out how much money you need to purchase a home. You don't want to save everything you need to get you through closing and down payment and not leave your self anything for the unexpected when it's all said and done. Which leads beautifully into the next point.
Are you financially ready to buy a home?
We were fortunate to make some money from selling Kevin's townhome, so we had a decent chunk of money for a down payment on a house and all of the other expenses that come along with buying and owning a home. Some of the things you need to consider when asking are you're ready to buy a home are,
Do you have the funds you need to buy a home?
Do you have enough saved for a 5-20% down payment on a house?
Do you know how much you can afford to spend?
Is your budget in order?
Do you have 3-6 months living expenses saved in addition to the money you need for down payment and closing costs?
Do you have money set aside for the unexpected repairs that are going to pop up eventually?
How about moving expenses?
Are you breaking a lease?
If all of this sounds like news to you then this may be the place you need to focus your time before you start looking for your dream home. Take the time to really evaluate your spending. Use the tools that are available to help you budget and plan for your eventual purchase. Buying a home is one of the largest purchases you'll ever make, so you want to make sure that you're not taking it lightly.
We also wanted to house hack!
This one was a big one for us when we were considering if we were ready to buy a home! We also knew that we wanted to buy a home as opposed to living in an apartment or renting a house because we wanted to be able to house hack. What do I mean by house hack? Well, we wanted to be able to get our home to work for us. Things like Airbnb allow you to rent out your entire home or a room in your home for a fee. We were past the phase in life of having or wanting roommates, but still wanted to be able to host short term guests and make a little bit of money in the process. Though this house hack doesn't cover our mortgage, it is a way for us to bring in a little bit of extra money for savings, vacations or paying down our mortgage. Apartments and landlords can have restrictions when it comes to renting out a room under your lease, so owning gives us more flexibility. (side note: there are things that you need to be mindful of when looking into buying a home with the intent to do short term rentals.)
We wanted space and wanted to make it our own.
I feel like this one is accompanied by a huge sigh of relief when you read it so if you read it that way, that is exactly what I intended. Living with a parent for almost a year after being out on your own as an adult can be challenging. We were grateful for the opportunity, but realized how important it is for us and our relationships with our parents to have our own space. Now, realizing you want your own space doesn’t automatically equal buying a home, but we knew that owning a home was the next part of our chapter. The experience of living with family just further drove home the point.
We also wanted to personalize our space. My mom is a general contractor and my dad is a carpenter. I grew up around residential construction and our home growing up always had some sort of project going on. I have realized as an adult how much I missed that. I miss waking up on the weekend to my dad working on something and asking my sisters and I for help. I knew it was an environment I wanted to recreate for our own children. Owning a home means you have the freedom, providing you have the funds, to do those weekend warrior projects.
You can afford to buy.
This pint might seem a little redundant, but that is because it is SO important. I assume that if you are considering buying a home that you have some capital stocked away to do so. Even with FHA loans you still have to come to the table with some cash for your down payment, earnest money and closing fees. One of the things that was a huge factor in us buying was that we knew we could afford it. We also didn't spend more than we should have. We were pre-approved for a much larger loan than we were ever planning on taking out. Kevin and I calculated our monthly expenses and cost of living numbers multiple times, and still do regularly, until we landed on a number that we both felt comfortable with and we didn't spend a penny over it. We knew that it was important for us to be able to afford our home on a single source of income, so we budget and plan accordingly.
If owning a home is something you really want, and you're starting to wonder if you are ready to buy a home then this is really the first thing you need to do. Clean up your monthly spending, see what sort of monthly payment you can afford and then put the budget into practice. Remember to factor in everything! If you don't you many end up with an unwelcome surprise.