Spring and summer mean different things to young families. For some it’s a time of fun and adventure, while others anticipate a lengthy period of relaxation and recharging. And then there are those who don’t fit in either category. They’re the families who page through Trulia and Zillow looking for a new home to move into before the new school year begins.
Real estate markets are picking up after a long and difficult dry spell, and people are anxious to buy as well as sell. Young families who bided their time during the Great Recession and its aftermath are now ready to move out of their cramped accommodations and into spacious homes. Or are they? There are a few questions they need to answer before they can clearly determine a house is in their future. Here are some of them.
Am I ready for a house?
Living in an apartment or a rental home is fairly stress free. A problem pops up with the infrastructure or equipment, and a call to the management office usually corrects the matter. There is no office when you buy a house — you’re the repair person. And the interior designer, and the landscaper and the HVAC person. This can lead to stress and, in situations where folks purchase a older home, a good deal of money.
Are my finances in order?
In some cases the loss of a home is not due to overspending, it’s due to the amount owed on other things prior to making the initial purchase. Debt can seem manageable to a young family living in a rental. Then they move into a house with a mortgage, property taxes, increased utilities and additional fees from places like a home owner’s association. Soon enough the debt they once thought payable is no longer. A young family may be desperate to move into a bigger piece of property; however, they need to seriously review their current financial situation before making such a huge decision.
How much is the pre-approval, and do we need that much house?
It doesn’t happen as much after the Great Recession, but there are some financial institutions that still pre-approve large loans for families whose incomes aren’t even half as much. This provides great incentive to purchase a larger home with a bigger mortgage that they can barely afford. Don’t fall for this trap. Talk with financial officers to determine the actual value of the loan and wisely choose a piece of property that falls well below the loan amount.
Is the home in the right location?
Some young families purchase a home because they can. Unfortunately these impulsive purchases can lead to another move when the school district doesn’t work out for the kid or the neighborhood begins to fall apart. Should the search for desirable homes within the pre-approved loan amount not pan out, consider holding off for a bit while more debt is paid off and the financial situation improves.