Choosing to plunge into home ownership can be a daunting decision for some. This quiz should help determine if buying is your best bet. All you have to do is write down the letter that best describes your current financial situation and then count how many of each letter you have. The letter that you have the most of will correspond with an answer at the end of the quiz. Ready to get started?
Let's take a look...
Is your income reliable and continuing?
Do you have savings available to put towards a downpayment?
How is your credit?
C) Other or not sure
Do you owe on numerous credit cards?
C) Not sure
Do you have pets?
C) Not right now, but I want to get one
Do you need to make your space your own?
C) Doesn't matter to me
Are you planning a life change soon such as staring a family or returning to school to further your education?
C) Not sure
Do you know which neighborhood you want to live in?
C) Doesn't matter
Do you have experience making any large, regular, monthly payments?
C) Not sure
How do you feel about property repairs and maintenance?
A) I don't mind doing them myself
B) I'd rather call someone else to do them
C) I'm not sure yet
Are you just meeting monthly debt obligations or do you have extra funds at the end of each month?
A) I do have extra funds available
B) My budget is pretty tight
C) I'm kind of somewhere in the middle of those two depending on the month
If you answered...
Mostly A's: It looks like a home purchase may be in your future. Your steady income and good credit makes mortgage financing a viable option. Your need to customize your space makes ownership more desirable than renting as landlords often have restrictions on what kind of alterations you can make to your living space. If you are currently renting and thinking of taking the next step, you're half-way there. Be prepared for a mortgage payment and property taxes as well as all of the extra costs that come with home ownership such as repair and maintenance costs. Talk to other homeowners and get an idea of what you're getting into before you commit to a large purchase.
Mostly B's: Renting may be your best bet for now. Whether it's your debt level or maybe your income isn't steady, it's better to buy when you're ready rather than rush into a large purchase that isn't always easy to get out if it isn't working out for you. If the idea of fixing your leaky tap or painting your deck doesn't interest you, renting may be a lot more appealing as those repairs and maintenance can be done with a call to your landlord. Renting may make sense for the budget conscious and for those who may not yet be settled in their life due to just finishing school, or changes in a romantic relationship such as a break-up or an engagement. It is expensive to buy a home and just as expensive to sell that home if it is not the right time for you to make the commitment to owning a home.
Mostly C's: You fit somewhere between rent and buy and the decision comes down to you. To keep your options open, it makes sense for you to know how you look on paper. If you have a strong financial profile, you should not have any issues in qualifying for financing when you find your perfect property, though do look at getting a pre-approved mortgage.
The bottom line
This quiz is not meant to replace the advice of a professional. Knowledge is power when it comes to the housing market. Before you make a decision, do your research. Don't be afraid to ask your friends and family for professional referrals to ensure you can trust and speak freely and openly about your financial goals. Call a realtor to see what the price range is for properties you like. Ask them what kind of rent you would have to pay to live in that same area. It may help you with the decision making process. After you have those two numbers, contact a mortgage professional to see if you qualify for the mortgage and are comfortable with the payments required for that price range with the down payment amount you have available.
You should have sufficient information to determine whether it is better for you to rent or buy a home of your own. If you're still undecided, don't be afraid to rent until you've made up your mind. The real estate market will still be here when you're ready.
If you need a mortgage, call Jackie at 780.433.8412 or firstname.lastname@example.org. Stay in the loop by following Mortgage Girl on Twitter: @Mortgagegirlca.