Buying a new house may seem a great achievement and a good investment in your life. Since there are tons of available houses that come with a low-interest loan, most people think that it may seem like the best time to buy a house. However, having your own home may not be as wonderful as you have expected, and renting a place may be best at the moment.
Always keep in mind that there are issues when buying a house which you should keep in mind, such as:
Not all houses are that available.
Over the years, housing prices have been decreasing, which has become a major great news for most prospective buyers. However, there will be less sellers as they would wait till the prices in the market go back up; hence, could not offer the best available, yet.
Getting stuck for five years.
There are numerous transaction costs when buying or selling a house. Despite the varying amounts, it will not be enough to close a deal. According to the co-director at the Center for Economic and Policy Research, Dean Baker, home buyers need to nest for at least four to five years in order to reasonably amortize the cost of one move.
Hidden and unexpected costs.
It is a great deal when you have calculated your hypothetical expenses for your future home, and have estimated that your monthly mortgage will cost you as much as your rent. Though there are more than what has been initially perceived, house expenses that are not often included in the major considerations include property taxes, maintenance costs, and utilities, which are more than what you pay for, Time reported.
Price-to-rent ratio.
The price-to-rent ratio is the best basis of home ownership consideration, wherein the price of the home is divided by the rent cost in a year. When the ratio is below 15, buy a house, but when it is about 20, experts advise that it is best to continue renting. The New York Times has an application which can help make the comparison.
