Tradeoffs of Ownership

You have to face the realities of owning before you blindly rush into a major decision....and buying a home is about as major as you can get when it comes to investing.

The Long & Winding Road

Home ownership involves a long-term financial commitment, not only to monthly mortgage payments but also to utilities, homeowner's insurance, and maintenance and repair costs, as well. Your monthly payments may be higher than the rent you're paying now, not to mention the upfront costs of making a 5-10% down payment plus closing costs.. Homeownership is not advisable it if it means you won't have a penny left over for anything else.

We'll find out how much you can really afford to pay for a house in the Steps ahead.

Itchy Feet Sufferers Should Wait

Don't buy if you don't want to stay.

Itchy feet isn't just for athletes. It applies equally to homes. If you aren't willing to commit to owning for at least five years to allow your investment to appreciate, don't buy. That means you won't be able pack up your stuff and leave with a month's notice, which you can do as long as you remain a renter.

One price of home ownership is decreased mobility.

If you expect to move in the next year or two because of a job change or some other reason, now may NOT be the time to buy.

The Job Jar Is All Yours

Forget about passing the jobs to a Super!

All the around-the-house jobs fall into your lap, the minute you become an owner. Someone (meaning you or someone you pay or cajole) has to mow the lawn and rake leaves; fix the faucet; call (and pay) the air conditioner repairman or roofer. All those things you took for granted as a renter are now your responsibility as a homeowner. That's why some people choose to buy into a condominium. This option minimizes the energy and time required for proper home maintenance upkeep.

Falling Market Gamble

Buying a home is a risk -- you can win or lose

If the real estate market takes a turn for the worse and home values fall, you run the risk of losing money on your investment. There's always some risk involved in real estate, especially if you buy during an upswing when home values are high.

Foreclosure of Your Property

This is a homeowner's biggest nightmare

Foreclosure is the worst homeowner nightmare. But don't worry, it really shouldn't happen if you make the right financial decision about purchase in the first place.

But, should you fail to keep up your mortgage payments, even for reasons beyond your control, the lender may foreclose on and sell your property. This results in the loss of not only your home but also your investment and your good credit rating.

Well, That's All of Them

We have alerted you to the major down sides of owning....we can move on now. If you complete this course, you will be prepared to handle even the smallest problem to come your way. The key is to keep learning.

Ready to Move On?

You've only just begun. But it does feel good to have one quiz under your belt, doesn't it? Now let's learn some other new things.

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