Signs That Indicate You Shouldn’t Buy a Home Right Now
Are you ready to empty the savings account that you’ve patiently contributed to so that you can sign the contract and become the first-time homeowner? If the answer is YES then you must know that entering into the home buying process without actually being ready is a big mistake.
So how do you know when is the right time to buy a house? Well, there are some signs that indicate if you should or shouldn’t opt for a property to purchase. To help you with that, let us discuss some of these common indications.
Home Buying Process – You Don’t Make or Have Enough Money
If you think that you’ve got enough money to enter into a purchase contract, crunch the numbers and then see the actual cost of it. You can use the help of a mortgage calculator here. Similarly, just the fact that you make good money is not an indication that you should buy a house.
A home purchase involves both ongoing and upfront money. Upfront money refers to down payment, closing cost and emergency fund. Ongoing money refers to mortgage payment, homeowner insurance, HOA fees, and other property taxes.
You Have Debt to Pay
Even if you do have enough money to not only buy a house but also to make your mortgage payments, you must factor in the debt you already have. For instance, if all your credit cards are already maxed out, you should first get these bills under control, before you enter get into the home buying process.
Typically lenders prefer total debt, including the mortgage payment, around 36% or less of buyer’s gross income. So take a thorough look at your regular spending habits and try to change them to get in a better financial position.
You Have No or Poor Credit
When your credit score is bad, it indicates a big financial problem. This may be skipping out on paying bills, bankruptcy or carrying a lot of debt. So before you make a decision to purchase a house, take a closer look at your credit score. This is important because your lender may raise some questions regarding loan, payments and other similar debts and may give some suggestions that would need some time to resolve.
You Aren’t Prepared To Stick Around
If you are not sure if you wish to stay in that area for the next five years, you must not consider yourself ready to buy a house. There is no point to buy a house just to sell it the very next year. This will make you lose money as appreciation will not catch up to the pre-purchase expenses and closing costs during this short time.
Remember purchasing a house is a long-term investment and one of the biggest expenses of your life. So be ready and prepared to make this decision otherwise it is much wiser to simply hold off on purchasing a house – at least for a while!
To get more information, https://RyanDeLaUz.com