When You Should Buy a Home?

Overall, home ownership can give you a feeling of accomplishment in reaching a goal while also helping you establish deep roots in your community. Unlike renters, who tend to be more transient in nature and less conscientious about their physical surroundings (they don’t own them, after all), home owners have plunked down one of the biggest investments of their lives in their communities.
The Department of Housing and Urban Development (HUD) advises first-time home buyers to ask themselves these questions before making their decision. If you can answer ‘‘yes’’ to the following questions, HUD says you’re probably ready to buy your own home:

• Do I have a steady source of income (usually a job)?
• Have I been employed on a regular basis for the last two to three
• years?
• Is my current income reliable?
• Do I have a good record of paying my bills?
• Do I have few outstanding long-term debts, like car payments?
• Do I have money saved for a down payment?
• Do I have the ability to pay a mortgage every month, plus additional costs?

On the downside, home ownership does bring with it significant responsibilities that renters generally don’t have to deal with. Once you’ve walked away from the closing table with those keys in your hand, you can no longer dial up the landlord when a pipe breaks or when the furnace stops producing heat. You are your own ‘‘go to’’ person on the chain, which means outside chores like cutting grass and cleaning roof gutters are suddenly in your lap. Owning a home also means not being as mobile as you once were, since selling a home and giving thirty days’ notice to a landlord are two completely different things.
Here’s a rule of thumb for renters wondering if ownership is right for them: In general, the longer you are likely to remain in a residence, the more advantageous it is to own rather than rent. If your career, family status, and other variables are likely to be stable for the next three to five years, then your housing needs should be equally stable. That’s not to say that a mobile professional shouldn’t buy a home (in fact, many relocating professionals never rent and simply buy and sell as they make their way around the country to different positions), but it does give you something to think about before making your decision.
For some folks, renting is going to be the right choice. For others, the positives of owning their own ‘‘home sweet home’’ will far outweigh the negatives.

Why should I buy a home?

Home ownership is one of the key components of the American Dream and a universal symbol of financial stability. You may be shelling out more money per month for a great apartment, but it’s still not the same as owning a home, which is associated with stability, security, and even wealth. The National Association of Realtors_ (NAR) says first-time home buyers generally buy homes because they are (in order of importance):

1. Tired of paying rent to landlords
2. Ready to tap the tax advantages associated with home ownership
3. In need of more living space, be it indoor, outdoor, or both Of course, home ownership brings with it both positives and negatives that must be considered, particularly if this is your first time out.

Despite the challenges it presents, home ownership is undeniably one of the most sought-after dreams that Americans pursue on a daily basis.
If you’re not sure whether home ownership is the right choice for you, take out a piece of paper, draw a line vertically down the middle of it, and write the words ‘‘pros’’ and ‘‘cons’’ as headers on each column. Then, take your time comparing the good and the bad aspects of your current living situation against the pros and cons of home ownership. If things are too heavily weighted in either column, it could be time to buy a home. For starters, right now you’re probably putting money in your landlord’s pocket—and helping him pay down his own mortgage—without reaping any of the benefits of that money. You’re not building equity in a home, and you probably have little or no say in the permanent decor, landscaping, and repairs on your home, even though you live there. If the home were yours, you’d bemakingmodifications (some of which can add value to the property), enjoying your own wall paint colors, and tapping one of the best tax advantages that Uncle Sam affords Americans: deducting points paid on a home purchase, mortgage interest paid (which can be a pretty hefty sum, particularly during your first few years as an owner), and property taxes. And because properties nearly always appreciate in value, you would also be building a nest egg for yourself that can be tapped when needed (in the form of, say, a home equity line of credit) or saved for future use.
As NAR discovered in its survey, people also buy homes because their lifestyles change and families grow, which means the need for larger yards, more bathrooms, or extra bedrooms. Those who do go in search of homes often find a much better selection than their renting counterparts, since single-family homes, town homes, condominiums, and co-ops come in all shapes and sizes. Other reasons for purchasing a home include the ability to build or improve a credit history, an investment in your future, and more control of your surroundings.

Mistake _15. Not Checking Out the Homeowners Association First

In most states, homeowner associations (HOAs) have broad powers to enforce the rules and collect fees and assessments. If you don’t follow the rules or pay your monthly fees, they can put a lien on your property and ultimately foreclose.
Having a strong HOA is a double-edged sword. Strict rules can keep the project looking uniform and inviting, thus maintaining its value. The opposite edge is that you may not like the rules, and changing them is not always easy.
To change HOA rules usually entails getting like-minded people together and electing a new board. If you can get a majority of the homeowners to go along with your proposals, great. If not, you can try again next election.
So you don’t end up in a project with rules you don’t like, get a copy from the association secretary and read them over carefully. Also find out what other rules have been proposed but not yet voted on. This will give you a feel for what direction the homeowners in the project are headed.