Is Now the Right Time for You To Buy a Home?

Purchasing a home is a momentous decision and shouldn’t be taken lightly. You’ll be investing a lot of money and time in this property so you need to be positive the choice is the right one. After getting married and having children, it’s one of the biggest changes most of us are going to face.

The American Dream is, of course, to own a home. Some people assume the faster you can grab your own piece of that dream the better. But sometimes people just aren’t ready to make the investment and the commitment yet. If you’re unsure how you feel about the decision, think about some of the questions below.

Do you have money saved?

This question is crucial for several reasons. First, you need to qualify for a mortgage. If you have a decent nest egg in the bank, you are more likely to be approved for the loan. Lenders like to see home buyers who are financially responsible and prepared for a rainy day. Do not confuse this money with the money you need for your down payment. This savings needs to be separate from those funds.

Second, you need to have money saved back in order to cover the repairs and other necessities arising from home ownership. If you rent now, the landlord fixes major problems, such as stopped up toilets and broken down air conditioners. When you buy a home, those responsibilities become your financial burden.

Third, saved money will come in handy if you or your spouse loses your employment or if some other change occurs financially. As you have seen in the news, many people who have not been able to save money lost their homes because of these changes. You don’t want to end up in their position.

Do you have time to maintain a home?

With most of us having such busy lives anymore, it seems impossible sometimes to juggle all of our demands. And a home of your own is another demand. You need to maintain the exterior, including watering flowers and bushes, mowing the grass, and keeping the appearance appealing. In many areas, you can be fined for failing to do these things if your property is allowed to deteriorate.

You also need to maintain the inside of the home. Obviously, you’ll still need to do housework and regular chores. However, if something gets broken, you’ll need to fix it or pay someone else to make the repair. You don’t want anything to reduce the value of your investment. If you don’t have time to do this type of maintenance, make sure you have the funds available to pay professionals to do the work.

Have you been employed for at least two years?
Has your employment been for the same employer?

These two questions are also critical from the mortgage perspective. Most lenders are not going to feel comfortable lending you money if you don’t have a history of long-term employment. Even if you worked ten years at your last job and just started a new one, some lenders are going to be hesitant. Plus, you should be hesitant. You don’t know what the future holds for your current job necessarily, and you don’t want to make a 30 year commitment only to get a pink slip a few weeks down the road.

The employer issue also leads into the next important question you should ask yourself.

Are you planning to stay in this area?

As mentioned several times already, becoming a home buyer is a long-term commitment. You can sell the property but that might not happen quickly or net you the asking price you need to pay off your mortgage. Be prepared to spend at least five to ten years in a property you purchase so it can build up some equity.

If you’re uncertain about you plans for the future, it might be a good idea to put off home buying until you are more certain. You don’t want to purchase a home then go through the selling process a short time later.

Is a home the right choice for you?

Home ownership is wonderful and provides many benefits, but it is not the right choice for everyone. If you have a family and need the extra features a home provides, such as a yard and extra bedrooms, then purchasing property makes good sense.

If you live alone, work long hours, and aren’t sure what you want to do in the future, you might be better off renting. If you’re older and don’t have the desire to do the exterior maintenance for your home but want the benefits of owning property, you might think about a condo instead.

One way to make this decision is to consider your answers to all of the questions above. Then ask yourself a simple question: Where do I see myself in five years? If the answer is in a home of your own at the same employer in the same city, you are probably an excellent candidate for buying a home. If the answer is hard to answer or if you see yourself elsewhere, you may want to push home buying onto the backburner for a bit.