Not everyone is at the point in their life where they should buy a home. Home and Living Cheat Sheet has 7 reasons why you shouldn’t buy a home.
When you buy a home, most people put down 20 percent of the price of the home, and then take out a 30 year mortgage for the rest of the cost. Think carefully about whether you can handle that large down payment and loan payments on a more or less permanent basis.
Property taxes are an additional expense that many first time homeowners don’t think about. They must be paid annually and in Austin in particular are always going up. Be sure to check the Travis County Appraisal District’s Website (or Williamson or Hays) to see what the taxes for your desired property are. Also, keep in mind that the taxes will go up if you pay more for the house than it is currently appraised at.
Most apartment dwellers are not responsible for their water bill. Keep in mind in a home you have to pay your own water bill, and may have additional costs for water if you have to keep your grass green or go from using a laundry mat to having your own washer and dryer.
In an apartment, you can call maintenance to take care of any repairs. However, when you own your home, you are responsible for all repairs or improvements. Think about whether you can handle the cost of unexpected repairs as well.
Many neighborhoods and condominium communities have a homeowner’s association, which charges separate fees on a monthly or yearly basis depending on what they cover and what amenities there are for residents. Make sure you factor the cost of any HOA fees into what you can afford.
Finally, if you expect to move within the next five years, either because of a work or life change, it makes more sense financially to rent. Also, owning a home traps you in place much more than renting. If you don’t like your neighbor or you get a job across town, you can’t just pack up and leave when your lease is up.