Though homebuyers are often stereotyped as young or middle-aged professionals happily living with their spouse and kids, there are still plenty of single individuals who are also considering the purchase of a home. In fact, there are even a few advantages to purchasing a home while you’re still single, such as the freedom to choose, decorate or renovate the residence on your own.
But don’t get us wrong! It’s not all sunshine and rainbows. You’ll also suffer a few drawbacks in exchange for your newfound independence. To help you avoid costly mistakes at this critical stage of your life, we’ve compiled a few tips that you might want to consider before making your big purchase.
Do your homework
This is tip number one for a very important reason: one should never underestimate the power of proper and thorough research.
Talk to friends and family about their relevant experiences. In particular, you’ll want to tap their experiences and connections, as well as receive recommendations and advice. However, don’t completely rely on their recommendations either. Always remember that it never hurts to devote some extra time to searching for the best deals.
If you doubt the effectiveness of this tip, consider the results of a recent study, which found that female homeowners pay an average of 0.5 percent more on mortgages than male homeowners. But was this variance based solely on the homeowner’s gender? A co-author of the study does not believe so. Instead, he attributes the variance to the fact that over 40 percent of the female homeowners relied mainly on recommendations, while only 25 percent of male homeowners did the same.
Check your budget
First-time homebuyers often make the mistake of miscalculating the initial and monthly expenses of their purchase. While you may be able to afford the down payment, there might be other initial expenses like closing costs, which could add up to a few thousand dollars.
Furthermore, mortgages and other recurring costs can be tricky to compute as well. You may believe a home to be more affordable than it actually is if you only compute the principal and interest of your loan. However, there are quite a few other recurring costs that you’ll need to take care of as well, such as insurance, taxes, and homeowner’s association fees.
Consider the future
Although you may be enjoying the single life right now, don’t hesitate to ponder the future either. Your home will represent quite a large investment, so you should always think about long-term factors before making your purchase. These factors include the area’s potential for growth, the property’s resale value, and getting married and raising kids.