You have been renting a place for a while now. Lately, the thought of throwing all that money towards someone else’s mortgage each month seems like a waste. How do you know when it is time to stop renting and actually become a Tulsa homeowner instead?
Tulsa Home: Rent or Buy?
Do You Qualify for a Mortgage Loan?
The financial aspect of homeownership tends to trip buyers up the most. First, find out whether or not you qualify for a mortgage loan. Interview various lenders before deciding which one to use. Then, start the pre-approval process. This provides you with a guideline for your price range. (Go above it and you will not qualify without at least putting more money down.) It also puts you in a stronger position when you put in an offer on a Tulsa home. But you do not want to become “house poor” either. So, just because a lender says you qualify for a certain amount does not mean you should spend that much. You might need to hold off buying a home until you save enough to cover your expenses.
Have You Saved Enough for Closing Costs?
When purchasing a Tulsa home, buyers always remember to save for a down payment. But they do not always remember the closing costs. This adds a few thousand dollars more to your expenses. For example, if you purchase a $200,000 home with an FHA loan using 3.5% down, your closing costs run you about $3100, according to Stewart Title. That may mean renting a little while longer to save up enough to cover your down payment and your closing costs.
What About Property Taxes and Insurance?
You found a great deal on a beautiful Tulsa home in a fantastic neighborhood. But did you factor in the cost of property taxes and insurance? Some neighborhoods cost more for these added expenses. Do a little homework. Talk to your insurance agent. Contact the tax assessor’s office to find out what to expect to pay in property taxes.
What is Your Timeline for Living in the Area?
Is Tulsa a pit stop before moving on to another city? Or do you plan on sticking around for a little while? Buying and selling a Tulsa home comes with a cost. Title fees, inspections, staging, real estate commissions. These costs all add up. Financial experts suggest that you live in your home for three to five years before you sell it. Why? To help prepare for the cost associated with selling (6% real estate commissions) and get you ready for the cost of buying another property later. If you plan on moving around a while before settling down, it makes more sense to continue renting.
Are You Ready to Take on Maintenance Responsibilities?
Finally, when you rent, your landlord usually takes care of the upkeep of your Tulsa home. You call them when a pipe bursts or the electrical system shorts out. But when you own a property, you become responsible for all maintenance and repairs. Not ready to do that? Then it is not time to become a homeowner.
The real estate market can be fickle. Over the past year, Tulsa home prices rose by almost 5%. But that does not mean it will continue on that trajectory forever. (We all remember what happened to the market in the late 2000’s, right?) Even so, over time, real estate continues to be one of the most stable investments you can make. When you decide you want to stop renting and become a homeowner, contact me.
Lori Cain, REALTOR®, Serving Midtown and the greater Tulsa, OK area. Call 918-852-5036.
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