With the new year upon us, many people are thinking about taking the next step and purchasing a home. But is it really a good idea?
Matt Allgeyer, a financial advisor at Wamhoff Financial Planning and Accounting, visited Fox 2 studios Wednesday to discuss the pros and cons to owning your own home.
Allgeyer says owning a home may significantly improve your chances of a quality retirement. It is likely that owning a home means you will have at least some built-in wealth, leading to lower monthly expenses than most renters will have.
Owning a home mortgage free could eliminate one of your biggest monthly bills. And downsizing your home in retirement may help you add to your retirement savings and cut your monthly expenses at the same time.
Paying off your mortgage before retirement should be a goal. But if you don’t think you will be able to accomplish that, buying a home may not be in the cards for you.
If you’re not financially stable, wait to purchase a home. Be sure it is in your best interest to buy.
Buying a home may call for a large upfront payment that you do not have with renting. Renting might be a better deal than homeownership in some cities while in other areas homeownership is a much better financial deal. Consider your location before purchasing.
When it comes time for you to buy a home, purchase one within your means, Allgeyer says. Do not be tempted to borrow more than you can afford.
If this is your first home, buy small. You can always upgrade with time or buy a larger house as your family grows, a single individual or a small family most likely does not need a five-bedroom home.
Be mindful of loans and mortgages, shop around, and research to find the best interest rates and deals.
Look at all expenses when budgeting for a home. Call local utility companies to get an estimate on cost, taxes, insurance, cost of commuting, and possible future home upgrades.