Many young couples and even young adults are being counseled or encouraged by friends and family members to buy a home. They are told that renting an apartment or a home is a waste of money. They might add, “Why are you paying someone else’s mortgage?” Please don’t listen to this “wise” advice. While owning your own home does sound nice and yes, homes do generally tend to appreciate, there are many reasons to wait or to never buy a home. Consider wisely whether to rent or buy.
Aside from the fact that you should be debt-free, have at least 20% for a down payment and money for closing costs, you also have to figure in that you are going to have pay for any repairs to your home. You also to pay to replace your air conditioner and/or heater, appliances, etc. Any and all expenses that a landlord would pay for are now your responsibility. If you are not going to be staying in the area for long time, buying a home is not a wise move. When you have to move, you then have to sell your home. When you put your home on the market, you are hoping and praying that the home will sell quickly and that you’ll make some money on the sale.
While the housing market is picking-up right now, we don’t know how long the market will continue to go up. What happens if you buy a home now, then in a couple of years you have to sell and the housing market goes down? You are going to end-up losing money on your home, provided you are able to sell it. If you end-up with a short-sale, when you file your income tax return, you’re going to have extra “income” because of the short-sale.
If you do decide to buy a home, please make sure you weigh everything before you take the plunge. The American Dream has changed. Our economy is not what it once was. Gone are the days of staying put in one job and retiring with a pension. This allowed you to buy your home and pay it off by the time you retired. Now, people are constantly going from one job to another. They are moving from one city or state to another. Therefore, think before you buy.