I paced the floor of my apartment right before midnight — the time when the bid would be final. Did I make the right choice about buying a house? Was I ready for homeownership? Owning a home is a lot of work, and you’re presented with a lot of unique challenges as a single woman. But it can also be a great investment, especially as rental prices continue to rise.
Here’s what you should consider before buying a house on your own.
More than one in five homeowners is a single woman, so it’s clear that independent women comprise an increasing portion of overall homeowners.
Chances are, someone you work with, know from school or go to the gym with has bought a house on her own. Luckily, that means you’ll have plenty of people with varying experiences who can give you advice about the home-buying process. One of the things most of them will probably tell you is that it takes a lot longer than you’d think.
Buying a home is a long and complicated process. From the initial stages of pre-approval for your mortgage to finally moving into your home, it can take many months.
While it can be frustrating, this time leaves you with some cushion, which is nice, especially considering the size of the investment you’re making. Waiting to close the deal on your house can give you a bit of time to prepare for the closing costs you need to make, which can be anywhere from 2 percent to 7 percent of your home’s value.
Closing costs aren’t the only “hidden” fees you need to think about saving for. Another thing to keep in mind, especially if you’re buying an older home, is repair costs.
When you’re the homeowner, you can’t call a landlord (or, in my case, my dad) to come and repair your air conditioning unit or figure out why the hot water isn’t working.
Things can break at any moment, and you’ll be in charge of repairing or replacing them as needed. Though repairs can add up, the cost of your mortgage vs. your rent can give your throbbing wallet some sweet reprieve.
Repairing something as seemingly simple as a leaky faucet can cost upwards of $300. A broken ceiling fan may leave you with a $1,000 bill. Each time you need to call a repairman or plumber, be expected to drop at least a couple hundred dollars for their time and services.
When you first look at the cost of rent compared to a potential mortgage, you may be surprised to see a mortgage payment is typically much lower, depending on the terms of your loan agreement. But while your payments each month may be smaller than monthly rent payments, you’re not actually saving money in the long run. Lower monthly mortgage payments are usually the result of a high down payment or longer mortgage terms.
For example, if you’re willing to agree to a 30-year loan term with a 4 percent interest rate, you can purchase a home worth $300,000 by making monthly payments under $1,600.
However, this isn’t true in every state. While you may save money buying over renting in New York, Massachusetts, Illinois and Pennsylvania, it’s actually more cost-effective to rent in Hawaii, Montana, Utah, D.C. or Colorado.
Mortgage payments go toward something you’ll actually own, unlike paying rent. However, when you rent, you typically pay one cost to cover all your household expenses. When you’re the owner of the property, there are other expenses to consider.
Don’t forget about other expenses you’ll need to pay as the owner of the property. As a renter, your landlord is responsible for property taxes, most repairs and potential homeowners’
Homeownership also means you’re responsible for a number of different insurance policies, loans and agreements. Insurance costs depend on a variety of factors such as the amount of your coverage/deductibles, location of your home, credit score and more.
The average homeowner spends just over $1,200 per year on insurance. However, if you’re looking to purchase a house in Florida, Louisiana or Oklahoma, expect to pay closer to $3,000. A house in Hawaii is much cheaper to insure, coming in at $330.
If you’re unsure what you’re signing on for, you may make some serious financial mistakes that can affect you for the rest of your life.
Ultimately, I rang my realtor just before midnight. In that small moment, I knew it wasn’t right for me — especially when a huge wave of relief washed over me. It could be right for you, though.
Owning a home as a single woman is a wonderful decision for many people — I’m just not one of them. Be sure to consider the financial obligation, responsibility and time commitment of homeownership before you make an offer.