Purchasing a home in St. Augustine, Florida, or anywhere in Northeast Florida, will inevitably be one of the biggest financial decisions of your life. Determining if it’s the right time to buy depends on multiple factors beyond your finances. While money is crucial, you should also consider your age, the current real estate market, and where you see yourself in the future.
So, should you rent or buy? Let’s find out by asking yourself the following key questions, tailored to make smart decisions in the St. Johns County real estate market.
What are your future plans?
In the short term, renting is often cheaper. Renting involves fewer costs, such as first and last month’s rent, utilities, and moving expenses. However, if you decide to purchase a home, several costs come into play. Besides the down payment, you’ll need to cover land transfer taxes, legal fees, and potentially closing costs.
Owning a home also means your monthly expenses will likely be higher than renting. So, evaluate how long you plan to stay in the area. If you foresee staying in Northeast Florida long-term, buying is likely the better financial decision, especially with home appreciation in places like St. Augustine. If you only plan to stay for a few years, renting may be cheaper in the short run.
How old are you?
If you are still in your twenties you may end up relocating due to relationships or career opportunities. In which case renting would give you more flexibility than purchasing.
If you are in your thirties and are in a longer term relationship and are more established in your career, then purchasing may be a better option.
As well, most people spend their twenties saving so they can purchase in their thirties. But the sooner you know where you want to live and who you want to be with, the sooner you should purchase.
How much does it really cost?
There are many fees associated with homeownership. In addition to the deposit, other costs include lawyers’ fees, land transfer taxes, closing costs for new builds, and moving expenses. Once you’ve moved in, you may also need to budget for renovations and furnishing.
For a Northeast Florida home-buying experience, remember that owning comes with more than just the mortgage. You’ll have to consider property taxes, insurance, and maintenance. Renting may appear cheaper initially, but homeownership can offer long-term financial benefits, including equity and potential market appreciation.
Are you in high-interest debt?
Before making a home purchase, assess your current debt situation. If you have high-interest debts like credit cards or car loans, it might be financially smarter to pay those off first. Lenders often view outstanding debt negatively, which could affect your ability to secure a mortgage.
Getting a mortgage with high-interest debt may limit your options and prevent you from securing favorable terms. So, clear off existing debt before committing to a real estate investment.
Do you have the deposit saved?
If you do not have between 10% and 20% of the purchase price of the home saved then your monthly payments will be a substantially lot more. Putting down as much as you can will keep your carrying costs lower.
As well, if you do not have at least 20% saved, you will likely have to insure your mortgage which can up your monthly payments.
Assess your current savings, see how long it will take you to save a deposit and start looking once you have it saved.
Another option, if you feel comfortable, is asking your parents to lend you a certain percentage towards the price and paying them back a certain amount every month, so you can sooner get into the market.
Run the numbers and know what makes the most sense for you.
Is your job stable?
How many years have you been in your job? Do you plan to stay in the field you are in? These are the types of questions you should be asking yourself when thinking about purchasing.
If you are happy in your line of work, you plan to stay in the city you are in and you are confident that your job is stable, then purchasing is likely your best bet.
But if you are in a line of work that involves contract, seasonal work or if you have just started your job or would consider moving somewhere else, then you should hold off on purchasing until you are more decisive.
Conclusion
It might seem like an obvious choice to buy a home to build equity and benefit from future appreciation in a market like St. Augustine, Florida. However, purchasing isn’t always the best option if you’re just starting your career, have other debts, or haven’t saved a sufficient deposit.
Make sure to carefully assess your financial situation, job stability, and future plans before making a decision. Ready to make your move? Whether you’re interested or curious about home-buying in St. Augustine, reach out for personalized advice. Contact us today to begin your real estate journey!