The mortgage and real estate crises aside, home ownership can be one of the best investments you can make – if you're prepared. Before taking the plunge, ask yourself a few questions:
- Are you prepared for the responsibility? When you're a renter and the water heater or air conditioner breaks, no problem – just call the landlord and he'll fix it! As an owner, though, all home repairs and maintenance are your responsibility. Of course, there's also the financial responsibility. To buy a home, you'll likely take on a mortgage for hundreds of thousands of dollars that stretches out as far as 30 years.
- How secure is your income? Few people have a crystal ball to see into their employment futures, but it pays to have a relatively stable job and income before embarking on home ownership. To qualify for a mortgage, it helps to show that you've been consistently employed for at least two or three years. Also, keep in mind that if you recently started a new business or are newly self-employed, it might be more difficult to receive mortgage approval.
- Have you planned for the future – both short and long term? For most people, buying a home should be considered a long-term commitment. Therefore, you should have a good idea of your plans over the next three, five and even 10 years when it comes to your job, career and family. For example:
- Do you plan to get married soon? If so, consider buying something together with your spouse so you're both in agreement.
- Do you plan to start or grow your family? If so, keep this in mind as you decide what size house to buy and its location.
- Do you plan to change jobs? If so, and this change may involve relocating to a new city, this may not be the best time to buy.