Owning a home is, for many people, a landmark moment in their life. When you first step through the front door of a house that is yours, and yours alone, it feels like a moment that will define much of your life going forward. And yet there are numerous people who continue to rent when they potentially could buy. What is stopping them from joining the ranks of homeowners? Well, it’s definitely worth looking into this question, because those people aren’t stupid – there is every reason to be hesitant, and below we’ll go into some of those reasons, as well as highlighting how they may be mitigated.
You’re tied to a home you buy
When you rent, there are a lot of reasons you may feel like your money is going nowhere. One thing you can say in answer to that concern is that paying monthly rent does buy you some freedom. If you grow tired of where you’re living, you can at short notice decide to move somewhere else. If a job opportunity comes up halfway across the country, or in another country entirely, you can jump to it in next to no time. If you’ve just bought a house, you’re tied to it to a certain extent. Sure, you can sell a house within months of buying it, but you will have to pay all the costs involved in getting it on the market.
The key point here is that you should only buy a house if you’re not open to the idea of living or working elsewhere any time soon. At a minimum, you should be expecting to live there for ten or more years.
You’re spending a lot on a compromise
Buying a house is a fairly exhausting process. You will view a lot of properties, pit one against another, look for the best deal, and above all try to see yourself in these houses in ten, fifteen, twenty years’ time. At the end of the process, if all has gone according to plan, you’ll move into a house that was bought and decorated by someone else. It’s not going to be your dream home. To turn it into your dream home will take some remodeling, a bunch of new furniture, and perhaps a number of years. And for that, you’re going to be paying a chunk of cash.
What you can choose to do instead is work with some experts on creating custom homes that fit your ideas for the perfect house. As architects and builders have a free hand, this will often cost less than buying an existing house and remodeling it.
It’s hard to afford a house right now
The very real truth of the matter is that house prices, especially in major cities, are a tough ask for young professionals to meet. All things being equal, owning our own homes would be preferable to paying someone else’s mortgage for them, but there is a reason that people are reluctant to buy and it’s not that they enjoy suffering. It’s possible to get a mortgage with a relatively small deposit, but that does leave you with a steep principal amount to pay off, and it’s no coincidence that high-risk loans were instrumental in causing the 2000s financial crisis.
You can usually find a mortgage for 5% of the total house price, but you absolutely shouldn’t take it. The absolute minimum should be 10%, and the greater deposit you can put down the more freedom you’ll have to find better mortgage deals with lower payments and interest.
There are bigger priorities than buying a house
This is simply objectively true. You should only buy a house when you have the stability in your life that allows you to do so, the desire to do it and throw yourself into the project, and most importantly, enough money to get it right. Yes, it is meaningful to be able to walk through that door and call a home your own. It should not come at the expense of experiencing other things in life, like traveling and gaining skills. Life should not be a race to get yourself set up in a new house; the house should be a crowning glory on a life you’ve worked to make as good as it can be.
When it comes to buying a home, the most important thing is not to simply be able to say you’ve bought one – it’s to get a home you love and which fits in with your wants and needs.
Main image: Pixabay – CC0 Licence