Although mortgage rates are still historically low, it may not be the time for some people to buy a house. Sometimes, thoughtful consideration and looking into many aspects of your life could give you the answer of why you may not want to buy a house right now.
A housing expert gives some ways to change those issues to get you into a better financial and mental strength, and finally to a place in life that is more conducive to purchasing a house.
Here are some reasons shoppers aren’t ready to buy and solutions to combat the issues:
More costly than renting
In many cases, the monthly housing costs (including payment, property taxes, insurance and upkeep) could add up to more than what it costs to rent, says Cara Pierce. She is a housing counselor for Money Management International, a budget and debt counseling company.
Plus in some areas of the country, home prices have jumped so high that it is hard to buy your first home.
Answer: Stay within your budget. Know how much you can truly afford, not just what you can qualify for.
“You may want to buy a little less house than what you can qualify for if it means that you can still afford to go out to eat or take a vacation once in a while,” she adds.
Some people can forget to pay that credit card bill twice in one year, and that really dumps acredit score. With low credit scores, you might be able to find a mortgage but your options are slim and interest rates high.
Answer: Ask for help from a housing counselor on how to improve your score quickly. It will save you money in the long run when you can pick and choose from mortgages.
Water, sewer, garbage, satellite television and other bills can add to your monthly costs of living after buying a home. Pierce says she never paid these when she rented because they were included. Plus with more space in a house comes higher electric and gas bills.
Answer: Utility bills should be planned in the budget. If it is an existing home, ask the current homeowners how much their bills for electric, gas and water/sewer/garbage run.
Many utilities companies will even provide a 12-month average if you just call to inquire about an address you are interested in owning.
Lawn and pool care
“When I was renting I never had to worry about putting chlorine in the pool, mowing the lawn or trimming the hedges,” Pierce states. “Now that I bought a house, I have to either do it myself or pay someone else to do that.”
Even if you choose to do it yourself, you still have to buy the tools to do it with.
Answer: Shop around to see what it would cost for pool maintenance. Consider whether or not you will really get enough use out of the pool that it justifies the expense.
Shop around to see prices for yard maintenance. Does it just cover the lawn, or is shrubbery maintenance included? Can’t afford to buy new lawn tools? Consider checking yard sales, thrift stores, and websites for used items for sale.
If your job seems unsteady or that the company could go under in a year, then buying a house would be just another burden in your quest to move on.
Answer: Wait to find a job that seems more fixed and possibly pays more so you can save for your dream house.
Not only can HOA (Home Owners Association) fees be costly, but they can be restrictive, too, Pierce states. HOA’s can determine what color you can paint the outside of your house, what types of trees or shrubs you can plant in your yard, etc.
Answer: HOA will be figured into the affordability calculation, just like taxes and insurance. However, these dues can rise over time, and their rules can change. You may want to consider whether it’s worth it to have a place with an HOA as opposed to property that does not.
When you rent, the landlord fixes a broken air conditioner or replaces the roof when there is a leak. Those things can costs thousands to repair or get new if you own your home.
Answer: Consider a home warranty, Pierce says. You might be able to negotiate the first year’s cost with the home sellers.
Also, some municipalities give grants for certain repairs, so it’s a good idea to check with your city hall or other local authority. You also need to have a savings account just for these types of surprise costs.
Even though most homes will come with an oven and stove, they don’t come with a refrigerator, washer or dryer, she adds. Some new homes don’t come with window coverings or a livable back yard.
“Where I live, the back yard would be a fenced empty space. There’s no patio, no trees or shrubs, not even grass,” Pierce adds.
Answer: You may want to consider purchasing a home that is good shape, but is not new. That way you’re already getting the back yard and window coverings in the purchase.
As for appliances, ask the homeowner if they would be willing to sell these rather than have to move them, or you may stipulate that in the contract.
More difficult to move
“Whether my job is moving across country or I just can’t stand the fact that I’m up all night because my neighbor’s dog barks, it’s not as simple as just giving a 30-day notice and moving when you own a house,” Pierce says.
Whether the market is good or bad, it’s always expensive and time-consuming to sell a house and move.
Answer: If there’s a hardship and there is not enough equity to pay the real estate commission plus the full amount of the loan (and possibly buyer closing costs), you may need to talk to the realtor and mortgage company about a short sale or deed in lieu.
If you buy a house with someone else, and that marriage or relationship breaks up, the home may no longer be affordable for you alone. Plus, it can be difficult to get out, Pierce adds.
Answer: Make sure you understand deeds, the loan itself and what the options are if the relationship does end.