So you want to buy a house? That is a good thing if you are ready for it. By ready I mean you are debt free with a 3-6 months emergency fund and the ability to put down at least a 20% down payment. I know, I know, in some places the 20% down is hard but not impossible. You might have to wait longer to get there, but trust me it will be worth it, as I’ll explain below.
Before I do that I want to throw in another wrinkle. This wrinkle is for people that might move often because of their profession. I will use ministers, of which I am one, as our example. However, this can apply to any profession. When do you buy a house under these conditions? I know some ministers that have been moved in 2 years and others that have been in the same church for over 10 years. So how do you know when to buy?
First and foremost, if you plan to buy a house and you’re in a profession that can move, ask, ask, ask your boss first! If in ministry, just call your boss and say something to the effect, “I am planning to buy a house in my current district. Is this a good or bad idea?” They may not tell you they are about to move you, but they may say, “hold off for a bit, and let us get back to you.” That might tell you that a move might be imminent. If you do that, you have saved yourself the trouble of buying a house only to be told you’re moving. It also gives you an opportunity to keep saving for that down payment.
My wife and I waited about 5 years debt free before we purchased our first home. In that time we saved a massive down payment. This was important because it reduced the monthly mortgage payment to a very affordable amount. It also gave us plenty of equity in the house. This allowed us wiggle room in our budget. To be clear, we had a 15 year fixed interest rate mortgage, and that is what I recommend. We made location a priority. Why? Because buying a house is all about location, location, location. The right choice will ensure your property appreciates and can sell quickly when you have to move.
After following our own advice about talking to our boss before purchasing, something came up 11 months later and we were asked to move. Hey, things happen. Since we bought in the right location, and an affordable but desirable house, the house sold in a less than two months and we ended up making a profit. While it sits on the market, most companies will pay for your housing while you live in the city of your new assignment. However, this will not last forever if your house is not selling at the price you want. After a while they might ask you to reduce your selling price. That is why you take your time up front to find the right house. It is at the beginning where you make your money on real estate. More on that tomorrow.
If you have questions don’t hesitate to ask here. Take charge of your money!
Your biggest cheerleader on social media,
P.S. Day 309 please pray for the 7.2 million goal for 2020