I have read a recent survey made by Bankrate that states 63% of millennials regret buying their house. This is more than the average 44% total of the US population that regrets buying their house.
Does that mean that buying a house is a mistake? Not really, looking deeper into the survey, you can see that the regrets are not necessarily from the lack of benefits in buying the house as much as a lack of planning.
Maintenance – 18%
Since you are buying, you are now responsible for maintenance of the property. Remember, maintenance costs an average of $6,000 annually. Renting or living with other people have made people unaware of these maintenance costs. If you want to buy, you should budget for a mortgage30% less than what you would for rent. As for previous damage, the best advice is to get a home inspection, determine if the price is right for the repairs you will have to make.
House Is Too Small – 12%
I know some people are saying, “So what? I/We can manage.” You may say that now, but what if you get married and/or start to have kids? Will you have enough space? Also will you have to make any adjustments to your property? My brother is having a second child, to create a bedroom though, he had to put in a window. Legally the room must have a window so the matter was all but completely out of his hands. You want to have room to grow, one way or another.
In A Bad Place – 8%
Is there a non-offensive way to say this? I will try a less offensive way. Did you just choose a house online just like you would something off eBay? There is next to no excuse to end up with a house in a place you would not desire.
First, you should definitely see the house you buy. Second, you should drive around the neighborhood during multiple times, both during the day and at night. You should see how the area looks during the day just to determine if the environment is good. At night, you should see if it is safe. Make sure to check during rush hour, for all you know, the street you live on could be clogged with traffic during that time.
Think It’s Not A Good Investment – 7%
Check out my previous post. Houses can be liabilities, and are not the investments they used to be. Do not buy a house expecting it to make you rich.
Too High Of A Mortgage
You have almost full control on how much mortgage you have. You can choose which house you can afford. Then you can put down almost as much of a down payment as you want to minimize the mortgage. Hey, you technically don’t even need a mortgage.
One of the greatest regrets I hear about mortgage is that they have PMI to pay for. This can be avoided by putting at least 20% down.
Mortgage Rate Is Not Optimal
This makes me afraid that people of my generation are buying houses too soon. Having a credit score under 760 will give you a less than stellar mortgage rate by adding more interest to your rate. It is important to get your credit score higher to buy a better home cheaper. It is better to spend a year or two improving your credit before buying.
House Is Too Big
This may sound picky, but having too big of a house can be a problem too. A house that is too large requires higher expenses from taxes to lawn care.
Every single common reason anyone regrets buying their house stems from lack of planning, not on the act itself. Buying a house should take at least one month to plan for. Much thought must be made before buying, it is a long-term commitment. Take in some advice from experts and read some books before buying.
Having even the most basic plan to buy your house will help you along the way to forge your wealth.