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Home Ownership

Most people want to own their own home and ownership is usually recommended by financial planners whenever possible. BUT, there are a number of items that need to be carefully considered before a purchase is made.

  • Can you afford to own a home?? There are many parts to the answer to this question.
  • Are you planning to stay in the home? For how long?

These two questions need to have positive answers before making a commitment. Affordability:

  • Do you have a 10%, 15% or 20% down payment amount carefully saved? A 20% down payment is considered a good solid amount to have in order to have a reasonable mortgage payment.
  • Will the mortgage payment be less than 25% of your after tax salary. A very important factor because there are other costs in owning a house.
  • Shop for your Mortgage. What is the interest rate? Should it be a 15 or 30 mortgage years? What is the monthly payment?
  • What is the property tax on the home now and possible future? Can you afford it?
  • What is the cost of the home owner insurance? Can you afford it?
  • Do you have or can you save funds for maintenance and upkeep? How much?
  • Is your job secure enough for this indebtedness?

Length of stay:

  • Real estate markets are very unpredictable, therefore you should only buy a home with the idea that you plan to live in it at least 5 -10 years. When you sell your home, you will want to get at least the amount you paid for it, if not a little more.
  • A home is a real asset and may well be the biggest Asset you ever own. Therefore it is important to be careful in the purchase and take good care of this investment.