Should Potential Repairs Stop You From Buying a Home?

How daunting should the idea of home repairs be?

If you're looking to buy a home, you probably know that you'll need to work your mortgage payment into your budget. You'll also have to cover homeowner expenses like property taxes, insurance, and ongoing maintenance. But there's one expense that might really scare you, and understandably so -- home repairs.

The problem with home repairs is twofold. First of all, they can pop up unexpectedly. Secondly, they can be difficult to budget for.

When you sign a mortgage, you'll be told how much to pay your loan servicer every month. You'll also get a property tax bill from your town and a bill from your homeowners insurance company letting you know what your premium looks like. You can also determine what maintenance items you'll need to tackle on an ongoing basis and figure out what they'll cost you. But it's almost impossible to predict what you'll spend on repairs each month, quarter, or year.

In fact, you may be hesitant to buy a home due to the potential for costly repairs. But is that a reason to avoid homeownership and keep renting?

Expecting the unexpected with homeownership

While home repairs can be unpredictable, there are steps you can take to better handle them. The first one is simple: Expect them to arise.

Maybe you'll get lucky and you won't face too many repairs early on in homeownership, but eventually, they're are bound to creep up, especially as your home ages. So resigning yourself to paying for them could actually help alleviate some stress, because you can work a line item for repairs into your budget. Any month you don't spend money on repairs, that money can go right into savings so you have a cushion for when issues do arise.

Secondly, have a healthy emergency fund before you buy a home. If you go into homeownership with enough money in savings to cover at least three months of living expenses, chances are, you'll be able to manage a surprise home repair that isn't catastrophic.

At the same time, if you factor home repairs into your budget, it's unlikely you'll spend money on them every month. If you're diligent about putting that money into savings during those months when issues don't arise, you'll be in a great position to boost your emergency savings consistently.

It's okay to keep renting

Homeownership isn't for everyone. If you really can't handle the idea of having costly home repairs to grapple with, you may decide that renting is a better choice for you.

As a tenant, you're only liable for the monthly rent payment. And while your rent could go up year after year, if you're hit with an increase that doesn't work for you, you can always find a new place to live. On the other hand, you can't just abandon your home in a snap if repair bills come up.

While homeownership offers a lot of benefits, like the chance to build equity in a property whose value can rise over time, it may not align with your financial comfort level. And if you're the type who doesn't do well with surprise bills, then buying a home may not be the best option for you.