The Merits of Buying Your Own Home

With interest rates currently at a forty-year low, many people that rent their homes are now contemplating the feasibility of purchasing their own house.  As the real estate industry slumped considerably over the past 2 years, it may now be cheaper to own rather than to rent. 

For households with limited income, like single moms such as myself, I went into a frenzy looking for a low mortgage.  Getting affordable mortgage hinges on several things.  First you may have to consider is your credit rating.  If you kept a healthy a credit, it would not be difficult to get a mortgage loan for your first home.  This means not only paying your credit cards but also utilizing it regularly.  Some may have the misconception that not having any debts would be good for your credit.  As a matter of fact, it isn’t. 

Financial institutions need a measurement system to gauge your credit value.  Not having any debts, even credit cards, means there is nothing for the financiers to evaluate. Zero debt doesn’t necessarily mean you are a good debtor.  So, if you shun credit cards, this may be a good time to get some and build your credit rating. 

In order to evaluate the cost-benefit of owning a home, calculate how much you would be paying for mortgage based on the estimated value of the home you wish to purchase.  There are several mortgage calculators in the web that will help you compare your monthly lease against your possible mortgage. 

However, the merits of owning a house should not be evaluated merely on costs alone.  The security of being a homeowner cannot be valued against being lessee.  The pride and self-esteem it can bring to you and your children is considered priceless.  Especially for a single mother like me, it validates your capability to take care of your children on your own.  It gives your children a sense of comfort knowing that they do not need a father to have security – Mom is strong enough to take care of everything. 

Nevertheless, review your budget well before making a decision.  Is your job stable at the moment amidst the staggering rise in unemployment?  Can your salary afford the mortgage without compromising your essential needs?  When evaluating your budget, make sure you take the conservative approach.  Don’t miss out on contingency expenses to ensure that you have enough buffer after paying your mortgage.  Remember that it is not merely unemployment that rose inversely with the decline in the economy.  So did mortgage foreclosures.  It would be unwise to take a mortgage on a new house when the risk of losing it in the future is high.  If your pay cannot take it, find out if there is a way to make adjustments.  You may opt for a cheaper or smaller house or find unnecessary expenses that can be foregone.  You may even consider getting a second job if your time can manage it. 

Although this may be the opportune moment to purchase your home, it wouldn’t end well if you tweak your expenses by deceiving yourself that it is feasible.  When making your decision, be level-headed and objective.  As much as we single parents want the best for our family, we have to be practical and avoid making our financial status difficult.  If your budget cannot afford it now, don’t stop believing that someday you will be able to buy our dream house.  It is not a matter of if, but a matter of when.