We often assumed that buying a home is the logical thing to do in our 20s. You know the process: finish college, find a job, start a family, and buy a home. Is this really still the case?
Do you have to buy a home in your 20s? Is it even worth buying a home before you hit 30? I wanted to break this article down in three questions that should help you determine if buying a home is the right decision for YOU right now.
How much money do you have saved up for your home?
How much money do you really have for a mortgage down payment? Just because you have a set amount of cash in your savings account, you shouldn't rely on this amount for being solely for your down payment. The reality is that you need to factor in the plethora of other costs that go along with buying a home. Some of these costs include:
- Property taxes
- Agent fees
- Lawyer costs
- The expense of moving
- I could go on but I won't for today
Don't assume that all of your savings will go towards the down payment on your new home. There are many other costs that you need to consider when buying a home.
How do you plan on making money?
How steady is your current job? Gone are the days of working in the same place for your whole career. Our generation is going to switch jobs often.
How much longer do you see yourself working in the same company? If you plan on quitting or looking for work elsewhere, you might not want to tie up your savings in a home just yet.
Do you want to start your own business? If you want to start your own business it's going to be tough to venture off on your own knowing that you have to spend a set amount of money on your mortgage. If you want to go off on your own, you might want to delay buying a home.
Look at your job stability and plan for making money before you tie yourself down with a home purchase.
What's the cost difference between buying and renting?
This is usually the deciding factor for anyone that wants to buy a home. We don't want to feel like we're “throwing money away” by renting so we conclude that buying is the better option.
The thing is that all home ownership costs need to be considered: mortgage, property taxes, maintenance fees, moving costs, potential repair costs, and insurance. Once you have considered all of the proper costs, you make a more education decision on the largest purchase of your life.
What's the difference between rent and ownership costs when making your decision? It's not always the better option to buy.
After reading this article I hope that you have a clear picture of what you plan on doing next when it comes to buying a home in your 20s. I'm here to answer any questions you may have in the comments section. I answer every single question in my eBook on Deciding if You Should Rent or Buy in Your 20s.
Image by cdsessums.