Home ownership is a completely different affair than renting and is more expensive than you initially imagine. Set up a phantom expense account to determine if you're ready for the transition.
Photo by woodleywonderworks.
Over at the financial blog The Simple Dollar they highlight for atypical things you should do before buying a house. Among them they offer this advice about setting up regular savings for at least 24 months prior to purchasing a home:
A mortgage payment requires financial discipline as well as enough money, period. Can you cover the mortgage? The insurance? The taxes? The constant expenses that go with homeownership?
Use a mortgage calculator to figure up what your monthly mortgage payment will be. Tack 50% on top of that for insurance, taxes, and other expenses. Subtract your current monthly rent payment from that.
If you can't save that amount each month, then you're not ready to buy a house of that size.
While nobody likes to hear advice that might point out they aren't ready to taking on the financial burden and risk of home ownership and it certainly isn't sexy advice, it's valuable. Speaking as someone who—as an almost brand new home owner—had his furnace completely die, in a freezing November, a week before his wife was about to give birth at home, you should never underestimate the expense of home ownership and its surprise bills.
For more advice on atypical things you should do before considering buying a home, check out the full article at the link below. Have your own advice for prospective home owners? Let's hear about it in the comments.
Send an email to Jason Fitzpatrick, the author of this post, at jason@lifehacker.com.
A good read for prospective home buyers.
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