One recent weekend I painted my bedroom walls a dark cobalt blue. Then I sent a photo to my cousin who said, \u201cThat\u2019s going to be hard to paint over when you decide to sell your house.\u201d I know. And I don\u2019t care. The color makes me happy. My home is small and quirky and nearly 100 years old. It\u2019s a reflection of my personality, but also my biggest investment.<\/p>\n
There are lots of ways to think about home ownership. For some it\u2019s an investment or a symbol of accomplishment, while for others it’s a place to set down roots and build a family. Many people see their home as an extension of their lifestyle. There\u2019s no right way to feel about home ownership, but the more you understand what home means to you, the less likely it will make you feel trapped\u2026or pinched.<\/p>\n
Owning a home is both a joy and a responsibility. You can paint the rooms any shade you like, renovate and remodel, and choose fixtures that make you smile. Of course, you also have to repair leaky toilets, mow the lawn, and have the furnace inspected. I know, because I\u2019ve done all those things. Not to mention sewing curtains, re-finishing doors, and installing shelving. But beyond being a place of your own, a home can also be a tangible financial asset. So you need to balance what you put into it with what you can get out of it.<\/p>\n
It used to be that home ownership was a rite of passage into adulthood. Things have changed in the last decade and a half. In the aftermath of the 2008 financial crisis, many people found themselves trapped in homes they couldn\u2019t afford. They had been lured into mortgages beyond their means. When the housing bubble burst, some owed more on their homes than they were worth.<\/p>\n
Now, some young adults are questioning the trade-off between home ownership and the freedom to travel, change jobs, or invest for the future. And with the pandemic, homes suddenly became workplaces, too. But remote work also meant that people didn\u2019t have to live within commuting distance of the office. The little white house with a picket fence is no longer everyone\u2019s dream \u2013 nor is it within everyone\u2019s reach.<\/p>\n
What kind of home to buy \u2013 and whether to buy a home at all \u2013 is a very personal decision. A home should fit your family\u2019s needs, lifestyle, and budget. With home prices continuing to rise, it\u2019s important to consider home ownership in the context of your overall financial situation.<\/p>\n
If you\u2019ve never purchased a home before, there\u2019s a lot to think about. Fortunately, there are resources available so you can study up before you take the plunge. Consider taking a homebuying class through a non-profit group or local credit union. There are also lots of resources online where you can learn the basics. And, of course, friends and family members often have great advice, too. Just remember that someone who has lived in the same place for decades may be blown away by the complexities of today\u2019s homebuying process.<\/p>\n
When you begin working with a mortgage loan officer and a real estate agent, keep in mind that they pocket a healthy sum of money when a home sale is finalized. So don\u2019t be shy about asking a lot of questions and being honest about what you want. That\u2019s what they\u2019re there for.<\/p>\n
Take your time \u2013 the home you buy should fit your needs as well as your financial situation. Be sure you understand all the components of the investment you\u2019re planning to make: Balancing your down payment with monthly payments. How an amortization schedule works. The impact of insurance, taxes, and fees. And how to factor in expenses like maintenance, HOA dues, utilities \u2013 and paint for the walls.<\/p>\n
Owning a home is a wonderful opportunity, but paying for it shouldn\u2019t restrict you from doing other things in life that are important to you. Your financial advisor can help you factor home buying into your financial plan, whether you\u2019re ready to buy now or you want to save for a down payment.<\/p>\n