A home purchase should be one that takes not only your present circumstances into consideration, but your future circumstances, as well. In other words, looking at your life now is, of course, important to consider when purchasing a home, but so is your future wants, needs and goals.
Here are a few of the ways in which it pays to consider the future when purchasing a home:
Think in terms of your future finances.
Your present salary and household income is the main consideration for lenders, but a look at your future finances should be considered, as well. For example, will you need money to put your children through college? Will you need to purchase a new car in the next few years? Will your salary decrease for any reason? All of these issues will affect your income, household budget and, ultimately, your ability to pay your mortgage each month.
Think in terms of your future professional goals.
Do you envision yourself in the same profession or at the same place of employment for the next few years? For many home buyers, changing jobs and professions is likely on the horizon, and doing so may affect your level of income or even where you will live. Because of this, it is important to consider your future professional goals when considering a home purchase. For example, if you think you will likely change jobs in the upcoming years, consider whether your new professional goals will take you away from the area. Moving just a couple years after you purchase a home is usually not a wise financial decision, so it pays to contemplate whether you plan to stay in the home for at least five or more years as to recoup your investment.
Think in terms of your home’s future value.
Is the home you want to purchase a property you envision increasing in value? Or is it located in an area that has experienced decreasing or stagnant property values? It is important to remember that a home is, ultimately, a long-term investment, so you will want to do your homework on the area in which you want to live to better increase your chances of getting into a positive investment.