Home Sweet Home?

Home ownership has been a big conversation topic lately with my family and some of my clients. In fact, a couple clients requested I write something about this concern. So, here you go! On demand writing by Tara!

First of all, there are a lot of financial questions that come into play once you own a house – and this is something I find a lot of my younger clients tend to forget about when they say “I want to buy a home.” Whenever I hear this from a client, I also ask (if I don’t already know) if they have also considered saving for a few other things, in addition to the downpayment – such as, closing costs, taxes, home inspections, deposits for offers made, any necessary repairs, moving costs, furnishings, etc. Most of the time, they  have not thought of this at all and are solely focused on the downpayment. Not only that, but they are counting every penny they have towards the downpayment!

Please, please, please do not do this, dear readers! This will give me nightmares if I hear of any of you doing this.

I completely understand the dream of owning your own house and the white picket fence, etc. Believe me, I do. But there is a big difference between dreamland and reality. In your dreams, the house will be perfect and your bills are probably magically paid too; however, that is obviously not usually the case in real life. So, before you start rushing out to meet with a realtor, make sure you consider all the various costs involved with buying a house, in addition to the down payment. Also, ensure that you are aware of the regular costs of living in (utilities, condo fees if applicable, property taxes, groceries) and maintaining the property because saving for the house does not stop once you are in it!

I know that this seems daunting and I will have people tell me that they want to focus on the down payment for know and figure the rest of out later. Usually, this is because they “can’t afford” to save that much and they want to buy a property sooner rather than later. This is another way of thinking that would get me to scream “don’t do this.” Spontaneity is nice and all, but I don’t think financial security/responsibility is the sort of thing about which anyone can afford to be nonchalant. If you are living at home or renting and cannot afford to save a lot now (once you have already paid your bills and contributed to your emergency fund), you have three options: prolong the period of time in which you will be saving for the home (eg. Instead of buying in one year, maybe give yourself three), adjust your budget for the place you want to purchase, or, cut your negotiable expenses. Do not borrow extra money to be able to make it happen faster. And, most importantly, do not rush into this decision just because you really want to be your own genie and make all your dreams come true.

Dreams can turn into nightmares really quickly and you should not enter into homeownership if you are un/under-prepared.

You can hate me now and thank me later – I don’t mind. 😉