Sometimes buying a home is just not the most practical thing to do. There are some situations when it's simply not the best idea for where you are in your life; and some cases where you'll be better served financially by renting an apartment in Lynchburg, VA. So how do you know if you're ready? Here are a few things to think about before committing to the time-consuming house hunting process.
How "stable" are you?
Is there a decent possibility of relocating within the next few years? Is your current job not as stable as you would like? Does your income vary from paycheck to paycheck? These are all good reasons to keep renting.
Buying a home should be a long-term commitment – at least five years or so. Don't plan on buying a house only to sell it in two or three years, you will lose money.
Are you really ready to maintain a home?
A lot of people who have never owned a home don't really appreciate the sheer amount of upkeep involved. If you rent a house or apartment, chances are the landlord takes care of landscaping, painting the exterior, and other routine maintenance. And if something breaks, they probably come fix it.
Not so if you buy a house. Be prepared to commit a substantial amount of your time and money to maintaining your home. According to one report, a good rule of thumb is to expect maintenance costs to total 1% of the home's value each year.
As far as the time commitment goes, it will vary depending on the type of property, age of the home, size of your yard, etc. But, if you're not ready to spend your Saturday afternoons doing yard work on a regular basis, maybe you're not quite ready for home ownership.
Sure you can buy a house with very little down, but should you?
Perhaps the most compelling reason to wait to buy a home is lack of cash. There are plenty of low down payment options available, but the extra costs may be to the point where you would be better off renting.
When to buy?
The best time to buy a home is when you can truly afford it, have the time to commit, and are going to be in the same place for the foreseeable future. Buying (and selling) a house can be a nerve-racking process, and it probably not something you want to do every few years anyway!
Take advantage of this little-known tax "loophole"
Recent tax increases have affected nearly every American taxpayer. But with the right planning, you can take steps to take control of your taxes and potentially even lower your tax bill.