For many, buying a home is one of the largest purchases they’ll make. It’s a substantial life event and taking on a mortgage is a large responsibility—not to mention the costs of maintenance around the house, projects, updates, etc. Here are three questions to ask yourself before you commit to buying a new home.
- Am I sure this is my long-term employer? Many residents and fellows headed into practice think they should immediately buy a home. In my experience, unless there are extenuating circumstances, renting allows you to be sure you are happy with your new employer and won’t need to move. Renting for 6 months also allows you to get used to the city and the neighborhood—especially if you are unfamiliar—to make sure you know where you want to buy.
- Is the mortgage reasonable, given other competing goals? Lenders will typically approve a doctor for a large mortgage and realtors will often show a doctor larger and more expensive homes. While the large, expensive home in the exclusive neighborhood may be the right fit for you, make sure the mortgage, property taxes and/or neighborhood fees won’t put you in a situation where you may feel or literally be house poor.
- Is the home in an area that may impact resale value? I have a client who bought a home in an area of Houston that was impacted by a hurricane and subsequent flooding. While the client’s home did not take on water, the garage flooded and many of the homes in the area are now boarded up, making the neighborhood even less appealing, so the client is unable to sell the home and is moving to another area of the country. A hurricane is definitely an extreme; however, there are other factors that could impact your ability to sell. Is your home too close to a freeway, a waste treatment facility, etc.? Before you buy, visit the home at different times of the day and drive around the neighborhood to make sure there is nothing that stands out as a possible detractor to a future sale.
Buying a home isn’t a decision to be taken lightly. Be sure about your employer, the terms of the mortgage and the location of the home before you decide to dive in.
Is a new home on your radar? Let’s talk through the best course of action for your unique situation.
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