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- The American Dream is often viewed as a cornerstone when it comes to buying a home.
- Melissa Jean-Baptiste was filled with regret when she closed on her first house.
- To avoid these feelings, make sure you have a fully-funded emergency fund. Also, estimate all costs above your mortgage.
Melissa Jean-BaptistePaid $40,000 to put down on her home.
She was not happy after she had written the check.
She was “filled with nothing more than regret and dread.” In her book she says,So…This Is Why I’m Broke,” “I didn’t have a clear vision of what I was doing, why I was doing it, and who I was doing it for.”
Jean-Baptiste realized, however, that she hadn’t been asking enough questions. She had also gotten caught in the rush to close. She wrote that “Deadlines were to be met and paperwork filled out. Everyone involved needed their share.” It was only because I did not ask questions that it felt like this. “I didn’t make the effort to become comfortable with this life-changing change, which would have required more adulting than what I was ready to do.”
The right questions she asked would have allowed her time to consider this life-changing situation and decide if she is ready.
Before you sign on the dotted lines, ask yourself these four questions:
1. Why do I do this?
Some people think owning a property is the ultimate achievement in life. But are you one of them? Buy a HomeFor the right reasons? A home purchase is a major life decision. It is a life-changing decision. 30-year mortgageYou are not only locked in to a certain geographic area, you could even be tied down to a particular job or industry. This is because you will need that income level for the mortgage.
Be sure you’re ready to face all of these challenges. You should not buy a home based solely on how old you are, your income or the fact that you have achieved success.
2. Do I need an emergency fund for my home?
You should prepare your finances before purchasing a home. Will you use your entire SavingsYou haven’t paid the down payment for your home yet? You may not be prepared.
You shouldn’t be wiped out financially by buying a house. After you purchase a property, your expenses may increase. You may have higher utility costs, or you may have to invest in furniture and landscaping. This is why it’s important to plan ahead. Emergency fundYou can save money on items other than what you use for your home.
3. Can I afford more?
The down payment is the most important factor when buying a house. Mortgage Interest RateMonthly mortgage payments. There is more to home ownership than just the monthly mortgage payment.
In Washington DC, for example, I was walking to my basement to do laundry shortly after purchasing my house. I fell into water up to my ankles. My basement flooded overnight. To stop further flooding, I had to pay for the water to be pumped out and waterproofed from the basement. That was several thousand dollars — more than my mortgage payment at the time. When you own a home there are many issues that can arise. You need to be able to pay more than your mortgage.
4. Do I need to rent for a bit longer?
This question could be an article in itself, but is something you should consider asking yourself. It is okay to rent. Actually, Renting instead of buyingRenting can give you more flexibility, both in terms if location and cost. Renting might be your best option now with the current mortgage rates and prices.
