Owning a home is something that most young adults dream of. The concept of having a space completely your own and possessing the freedom to do with it as you wish is a fantasy with limitless possibilities. Whether you’re still living at home or are currently renting an apartment, it’s easy to believe that all of your problems — regarding house rules, noisy neighbors, and snooping landlords or parents — would vanish with the purchase of a house; however, the grass isn’t always greener on the other side.
With an investment as large as this one, you don’t want to take the leap without considering every aspect — from cost to care — involved. Let’s take a look at what being a homeowner truly means in the grand year of 2019.
Consider how much you’re currently paying for rent. Odds are, though rent is certainly not cheap, it’s manageable — you’re able to comfortably pay your bills and handle the rest of your living expenses (such as weekly groceries, car insurance, etc.) without too much trouble. If you had to drop around $14,000 before even attempting to move in, that might not be the case.
When applying for a mortgage, homeowners are expected to put a down payment of 6% — $14,000 is the national average. That only gets your foot in the door: now, you need to calculate the monthly mortgage payments. Since paying late can send your mortgage into delinquency, the result has a devastating impact on your credit and financial health. Around 1.24% of mortgages in the U.S. are stuck in delinquency, meaning the owners can’t come up with the cash necessary to pay the loan back; if your payments are delinquent for too long, you run the risk of foreclosure — the lender will attempt to reclaim the property and you’ll lose your home. If you take the time to make sure you can afford the monthly costs of your home, however, you won’t face such a frightening prospect.
Fees And Frugality
Now that we’ve tackled the monster mortgage, let’s take a look at those more insidious fees, the ones you tend to forget about until you’re staring at a bill. The act of moving falls into this category; the average home contains about 300,000 things, all of which need to be organized, packed up, and shipped off to a new location. Whether you’re moving down the street or across the country, you’re going to need to figure out how you’re getting your entire life from point A to point B. Moving companies, though convenient, are costly, but renting a truck yourself isn’t all that different in price. Plus, you’re going to have to buy packaging materials (make sure to purchase 25% more moving materials than you think you’ll need to account for everything you’ll inevitably forget), adding up to quite the final bill.
Now you’re moved in, but every home needs to have protection, doesn’t it? Just as you can’t buy a car without car insurance, you can’t buy a home without homeowners insurance. The average monthly housing costs — complete with property taxes, insurance payments, and mortgage payments — is $1,443 in this country, although certain location-based circumstances could affect insurance rates. For example, homeowners insurance protects against natural disasters, but those living in California are expecting their premiums to triple due to wildfire risks; with that kind of inflation, choosing the right place to buy your home is as important as any other aspect.
Keep Her Standing
So, your monthly costs are covered and accounted for, what about accidents? One of the major risks involved in homeownership is the cost of repairs; as the sole owner, there is no landlord to turn to for any mishaps that occur. When your dishwasher breaks, you need to call and pay a repairman; when your home becomes infested with pests, you are responsible for finding and funding an exterminator.
It’s in your best interest to keep up-to-date on any maintenance, droll though it may be, that you have on your list. Natural gas serves around 66.7 million homes in this country — if your HVAC unit breaks down because you never changed the air filter, its repair or replacement is on your head (and wallet). Though you certainly may get lucky with a house that hardly anything ever goes wrong in, it’s a big risk to take if you’re barely making ends meet month-to-month.
If you’re considering buying a home, more power to you! Just make sure you have the capital to support your venture. Take stock of every conceivable bill you could ever conceivably have to pay, and figure out if the numbers pan out; worst case scenario, you have to buy a slightly smaller house, or wait a few years. Compared to mortgage delinquency and a crippled credit score, that really isn’t so bad at all.