Atypical Things to Do Before You Consider Buying a House [thesimpledollar.com]
Trent over at The Simple Dollar wrote a great piece on atypical things you should do before buying a house.
- Save a significant amount each month like clockwork for at least two years
- I couldn’t agree more. His recommendation to save the difference between what you are paying now and what your mortgage payment would be plus 50% for insurance, taxes and other expenses is brilliant.
- Sell all of the stuff you don’t use
- His rationale of less stuff = smaller home = increased likely hood that you’ll be able to afford your mortgage makes good sense. I generally believe we all have too much stuff anyways.
- Fix some stuff
- Seems like good common sense.
- Figure out why you are buying a home
- As I mentioned in a previous post on personal finance, lots of people do things when it comes to their finance just because they feel like they should or like it is what they are supposed to do.
All of those points are really great but I think the list is missing a few important things:
- Rent in the neighborhood in which you plan to buy before buying
- It’s one thing to have a sense of what it might be like to live in a given neighborhood, it’s another to actually live there. I’m reminded of a time when I was certain I wanted to buy a home in Port Moody BC, a suburb of Vancouver. After renting there for over a year not only was I sure I didn’t want to buy there, but I was also sure I didn’t want to rent there either.
- Have a 5 year plan
- Home ownership can be a good investment in the long run but it’s generally a poor investment in the short run. If you aren’t sure where you’ll be or what you’ll be doing in a year or 2 years even, buying a home probably doesn’t make a lot of sense. Do you want to travel in the next few years? Then maybe you don’t want to end up house poor by buying something right near the max of what you qualify for.
Buying a house is a huge commitment, the more time you spend making sure you’re making the right decision for the right reasons, the happier you are going to be in the end.
Four Atypical Things to Do Before you Consider Buying a House [thesimpledollar.com]