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Graduating From Renting To Owning A Home Are You Ready
Those that have just graduated may be contemplating a change in their living quarters. Some may be moving out of Mom and Dad's house or maybe out of dorms into their own apartments.
Are you ready to take an even bigger step—moving out of a rental into a home you can call your own?
Purchasing property isn't a simple process, so you should make sure you're prepared.
So, how do you know if you’re ready to move from an apartment to a house? Ask yourself these questions below to get a sense of where you're at—or what you have to do to transition easily into home-buying mode once the time is right.
Can I afford to buy a home?
Let's talk money. Buying a home is a hefty purchase. Probably the largest you will ever make. So you'll need a down payment (typically recommended to be 20% of the homes purchase price) and a steady income (i.e. a job) to pay your mortgage.
There are other costs associated with home ownership:
Closing costs (typically 2% to 5% of the home's purchase price)
Home insurance (cost varies by state)
Budget for unseen repairs and emergencies
It may seem renting might appear to make more sense than owning at first glance, that’s not always the case; our rent vs. buy calculator can help you compare the costs. You might be surprised by the results!
Another good first step to figuring out whether you can afford a house is to enter your salary and town of residence into a home affordability calculator, which will show you how much you'd pay for a mortgage on a typical house in that area. Or talk with one of our lenders about whether you would qualify for a mortgage, and how much you can spend comfortably.
Do you know where you want to live?
Since moving once you own a home is not as easy as just packing your bags, you really need to make sure you’re picking a home in an area where you’ll be happy. Is it in close proximity to where you work?
“It's not easy to just sell a house and move to a new one if intolerable neighborhood issues come up, since the transaction cost to sell—up to 8% to 10% of the sale price, so you need to really scope out the neighborhood.
When in doubt, try renting for a few months to make sure you like the area before you start shopping for a home to own for good.
Are you willing to to take care of your home maintenance?
Are you handy? Can you fix basic things around your home? Or does the thought of fixing things cause you great anxiety? If so, you may want to stick with renting which gives you a roof over your head without the work.
Owning your own home there’s no landlord to call if anything goes wrong; it’s all up to you. So you have to be either adept as a handyman, or willing to find and pay someone else to do such tasks. Or else consider buying a condo where the lawns and public areas around your home are maintained by hired help.
Bottom line: Owning a home is a big commitment. So before you jump into it, you should have confidence that it works for your circumstances.
Jennifer was born and raised in Maryland and for the last 21 years has resided in Middletown, MD. Upon finishing her studies at the University of Maryland University College with a Bachelors degree in....
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