Landlady ruling your life? No pets allowed? Maybe it’s finally time to take the plunge and call the shots in your own space. But, there are important questions to ask before taking the leap into homeownership.
How long do you stay in one place? If you don’t plan on living in the same home for at least three to five years, then owning is probably not the best choice. You’ll probably lose money in the long run.
And then, of course, there’s always money. How much do you make? Do you have job security? Have you built up savings for a down payment?
Maybe you’re thinking, “Hey! I can totally pay a mortgage. I pay less than that in rent!” But owning a home comes with a lot more than just a monthly payment and some utilities.
Property taxes alone are sure to hit the wallet hard. You calculate this annual cost by multiplying the assessed value of your home by the tax rate in your area. So if you’re living in New York and your house is worth $400,000 and the tax rate is 2%, your property taxes for the year would be $8,000. And don’t forget homeowners insurance and maintenance.
And this is AFTER you’ve paid your down payment and closing costs.
Renting may feel like throwing money away on something that’s not yours, but you’re not tied down. Once that lease is up, the sky’s the limit. The world is your oyster… you know… something like that. So if the time and money are right, it may be just the moment for you to finally buy the house of your dreams – and have all the cats you want.
Are you looking to get out of the renting life and jump into homeownership? Sounds like a great idea – and would certainly impress your friends and family. But there are a slew of things any first-time homebuyer should know upfront. In the Coinage video above, MONEY breaks down the essential things to consider when you’re looking to buying a home, from property taxes to closing costs. Take notes so your wallet and sanity don’t take a hit.