Is Homeownership On Your Horizon?

by Loreena Yeo on December 6, 2011

Is homeownership on your horizon? Are you excited about your possibilities? Wow… you can finally paint the wall black, green or purple just because you can!!! How cool would that be?

House Rule: Is Buying ALWAYS better than RENTING?

So, you pay $1,000 in rent now. For $1,000* in mortgage payment a month, you could buy a $150,000 home at 7% interest for 30 years. In the Dallas/ Fort Worth market, $150,000 buys you a pretty good starter home.

Hold on….. before you go on further, let’s ponder on some important issues of homeownership first.The $1,000 in mortgage payments have not included the property taxes and insurance. Okay, so let’s back up to a little less house then. Let’s assume that the property taxes and insurance is approximately $250 per month. That makes the mortgage payment (principle and interest) to about $750*. At that amount, you are probably looking at a house valued between $110,000 – $120,000. Still not bad.

(* Assume no down payment)

So, here you are. You put your signature on the dotted line. Your real estate agent called you to tell you that your loan closed and funded. You received the keys. You now own your American Dream. You move in and you are happy.

New homeowners start to think differently. The mix and match furniture from the college days suddenly do not fit the taste of their new home. They did not like the wallpaper the previous owner left behind. The yard needs to be mowed, edged and trimmed. The garage needs some organization. So, what would a “regular” new homeowner do in this situation? They go out to make Home Depot and Lowes their second home. They could also qualify for a reserved parking spot just because of their frequent visits. These are the unseen foreseen expenses that homeownership incurs. How much is ever enough? So, out they go to get a Home Depot or Lowes store credit. Zero percent interest for 18 months? Sounds like a no-brainer. Have pure intentions of paying this way before the zero percent deal ends? But life got in the way? Before you know it, you are looking at more debt.

Even if you are disciplined enough not to do home improvement projects and do not mind using the couch Aunt Janet gave you, homeownership could have maintenance costs to consider. Remember in your apartment days, when the air conditioning unit is not cooling enough, you pick up the phone to call the apartment manager? Gone are the days. When your heater goes out, you pay for the repair. When your toilet gets clogged, you sign the invoice.

It is not my intentions to dampen your spirits. But if I was your realtor – the one who watch for your best interest, if I did not discuss these scenerios about your possibilities and just share with you about homeownership as a bed of blissful, sweet smelling roses, I feel I did not paint the whole canvas.

A well-prepared new homeowner is a smart planner. Remember that your home should be a blessing for you. It should serve you and your family well for many, many years, not the other way around. So, if you feel that homeownership is on your horizon, pick up the phone and call. I’d love to share tips and strategies with you to make your American Dream a pleasant experience.

House Rule: Is Buying ALWAYS better than RENTING?
The answer: In the long-run, yes. In the short-run, no. It can leave a bad taste in your mouth for a while.

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