It's natural for renters to be nervous about buying a first home. But first-time buyers have a big advantage - they don't have to worry about coordinating the sale of their existing home. So relax, follow the process step by step, and find the right home.
Buying a home
is a major undertaking. Before taking the plunge, make sure that you've
thought it through and are ready to proceed.
Deciding to Buy
Consider your motivations for buying to help determine if you are really
ready to enter the market.
Personal Considerations Think about your personal reasons for moving. Do you need a larger
home to accommodate a growing family? A shorter commute to work? Don't
forget to consider the difficult aspects as well. Are you emotionally
attached to your present home - will it be painful to leave? Being mentally
and emotionally prepared is the first step toward a well-conceived and
Do You Feel Pressure to Move Now? Do you feel that you'll be priced out by a rising market if you
don't buy now? Or are you afraid you'll miss bargains in a troubled
market? Review our tips for evaluating real estate markets to help you decide
how to proceed.
How Long Do You Expect to Own Your New Home? Buying or selling a home is an expensive and involved process. Closing
costs alone can amount to 4-8% of the sale price - for both buyer
and seller, making a home purchase financially unattractive unless you
plan to own the property for several years. Remember that you'll face
another round of closing costs when you sell; so your house will have
to appreciate 8-12% just for you to break even.
Assess Your Financial Condition
Do you have enough cash to fund the down payment and closing expenses?
Can you comfortably afford the mortgage payments as well as taxes and
insurance? Do you have any credit problems? Review our affordability guide to help you get the answers.
Homeownership as an Investment
While markets can be turbulent and values occasionally decline, owning
a home remains an attractive investment over the long term. Additionally,
don't forget to consider the tax advantages
of homeownership - mortgage interest is deductible and profits from
the sale of a home are usually exempt from capital gains taxes.