TO BUY OR NOT TO BUY–THAT IS THE QUESTION
October 28th, 2009 categories: Market Trends
We’ve talked about this question several times. I have been a full-time, professional Realtor for 20 years–it is my sincere and firm belief that home ownership is the greatest thing since sliced bread for most people–and of course there are exceptions to the rule. Many young people should not buy a home–they may have to relocate to another area of the country, they may not have great job security and they just may not be ready for the responsibility of a mortgage. Think before you leap into a home purchase! Here are some guidelines:
- Be sure of what you can afford–and don’t buy more than that. Real estate is cyclical and it’s a whole lot easier to tolerate a down market if you have purchased conservatively.
- Make your purchase a long term decision. Common real estate belief is that you don’t recover your closing costs for about two years–if you need to move before two years, remain a renter.
- Look at the worst possible scenario. Don’t count on future raises to help with your purchase. If you don’t get that bonus or that raise, you can still continue to pay your mortgage.
- Avoid an Adjustable Rate Mortgage like the plague. If you can’t afford the standard fixed mortgage, you probably should not buy the property. Remember what we talked about–a worst case scenario.
- Think about what is important to you in a neighborhood. Do you need to be close to public transportation to get to your workplace? Do you need to be close to restaurants because you just plain don’t cook? How far away from work do you want to be–an hour by car or fifteen minutes by bus?
- What will the future bring? Of course none of us really know that and you should still give some thought to future possibilities in your home purchase. Could you need a place to work at home in the future? If you are a couple, might you need space for a child?
- Don’t count on being able to borrow more money to make improvements. Many homeowners in our country have seen the value of their home drop below and way below what the home would sell for in today’s real estate climate. Refinancing is NOT an automatic option.
Call me if you have any questions about the above or Chicago real estate in general–312-981-2360, direct, 312-607-1306, cell phone. Email is good too.
What is Your Refi Break Even Point?
This entry was posted on Wednesday, October 28th, 2009 at 12:18 pm and is filed under Market Trends. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
