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Relocating? 5 Things to Ask Yourself Before Buying a New Home – The Motley Fool

Image source: Getty Images

It is possible to take the emotion out of house buying.


Image source: Getty Images

It is possible to take the emotion out of house buying.

Key points

  • Unless you’re planning to stay for five years, the best financial move may be to rent.
  • No home is worth risking your financial security.

Now is a tricky time to relocate. As someone whose husband recently accepted a job in another state, I can testify to how stressful it can be. At this moment, I have more questions than answers and so many things to take care of that I find myself referring to a list a dozen times a day.

If you find yourself in the same boat, I’m here to tell you that it will all work out.

Get the “feels” out of the way

My marriage has involved moving to nine different states and two foreign countries. Each move has included a period of feeling overwhelmed by it all. And yet, I would not change a thing. With each move, we gained new friends and the kinds of experiences that have changed the way we view the world, making us more open-minded people.

It’s natural to be nervous, though. It’s normal to wonder if your adventure will be more like the Lewis and Clark Expedition or the Donner Party. How it turns out will depend, in part, on your decisions. This includes buying a new home.

So, acknowledge any nervousness you may feel, then put it aside as you try to make the best decisions possible. Before buying a home, ask yourself these five questions.

1. Do I plan to stay?

If you don’t think you’ll be in the new town for five years or more, you may want to consider renting rather than buying. Here’s why:

Let’s say you buy a home for $300,000. If you put 20% down to avoid private mortgage insurance (PMI), that’s $60,000. In addition, you’ll likely pay closing costs of 2% to 3% of the amount you borrow. If you pay 3% closing costs on $240,000, that’s another $7,200.

Now, imagine that you need to move in two years. As the home seller, you’re responsible for more fees. The rule of thumb is to plan on spending around 10% of the sales price to sell your home. This includes all real estate agent fees and closing costs.

In a normal …….


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