There are plenty of misconceptions surrounding the home buying process, especially when it comes to millennial consumers. Many young people cannot imagine the thought of owning a home due to crippling student debt and other accumulating expenses. However, in some situations, it may make more sense to buy than to rent.
So, when do you know that buying a home is the right decision for you? By familiarizing yourself with the home buying process, you can find more confidence in your buying power and make informed decisions. Read on for three ways to know your renting days are over!
You’re Able to Manage Any Debt
Your ability to manage debt is important when considering whether it’s time to begin the home buying process. Debt can be a hefty factor when determining if you are eligible for a mortgage loan.
Buying a home may still sound like a daunting task when you consider how long it can take to pay off. The most common fixed mortgage loan is 30 years, but shorter-term loans of 20, 15 and 10 are available. Shorter-term loans usually mean higher monthly payments.
Luckily, there are also options for loss prevention down the road. Life is bound to have its ups and downs, and if you’re afraid homeownership will make you go broke, there’s always another course of action to prevent financial insolvency.
Instead of panicking, consult with a financial professional during hard times to learn how to process economic difficulty. Government relief programs or mortgage refinancing can help ease the burden of overwhelming monthly payments that may no longer be realistic for the situation you’re in. Give those credit cards a break by considering all options to ease any strain on your expense report.
You Practice Healthy Money Habits
One of the most important ways to know your renting days are over is that you are mature with how you manage your money. Practicing healthy money habits is the first step to managing any debt. Know precisely what you have to work with by budgeting out your expenses, living below your means, and avoiding any late fees that may accrue interest or additional payments. As long as you continue on a path of financial fitness, your dreams of homeownership are not too far off.
Popular budgeting apps with automated saving capabilities and personal finance tools are a great way to build your nest egg. Separating your budget with monthly savings goals gives you something to build towards and allows you to assess progress over time. Prepare for any added expenses associated with home buying, like closing costs and interest payments.
You’re Ready to Invest
Many buyers, college graduates, find it difficult to consider taking on another substantial responsibility such as a mortgage. However, the average renter is still making monthly payments toward their living situation anyways. By making payments toward a mortgage, you’re investing in the future value of your home versus continuing superficial equity opportunities like renting.
By purchasing a home, you’re also able to build long-term equity. Home renovations supply the opportunity to boost your home’s value as well as create a more comfortable living space for you and your loved ones.
If you’re considering making big changes to your home, you may want to avoid taking out anything other than a renovation loan as many improvement projects do not recoup their full value when it’s time to sell. Making smart investments will help develop your money skills and allow you to gain self-assurance in owning a home. Thriving in the real estate market can prove to be a worthwhile endeavor that is sure to become easier with each new home you buy! We hope these ways to know your renting days are over gave you more clarity.
You’re not alone if you’re struggling with debt. Schedule a free credit counseling session with us today.