Our society views homeownership as a milestone in life. As a result, there is often pressure to buy a house as soon as possible.
But are you really ready to buy a house? Does it actually make sense in your situation? Before you make what is sure to be the biggest purchase of your life, take a step back and evaluate whether or not you are financially and emotionally ready to buy a house.
Your first step is to consider your financial readiness for homeownership. Determine the monthly payment you can afford. There are a number of rules of thumb, including the famous 30% rule that says you should only spend 30% of your income on your mortgage payment. However, the real question is whether or not you are comfortable with your monthly payment. Can you easily make your monthly payment fit your budget?
It’s not just about the monthly payment, though. You also have ongoing costs with homeownership, including maintenance and repairs, insurance, and property taxes. You might also have higher utility bills or need to purchase furniture when you move in. Owning a home is a long-term financial commitment, and you need to be ready for it.
If you are stretching your budget and trying to make a house fit into it, you probably aren’t financially ready to buy a house. Instead, save up a little more, pay down some of your debt, and see if you can improve your financial situation in the next year or two.
Even if you are financially ready to buy a house, it might not be a good idea. Part of taking on such a large responsibility is making sure that you are emotionally ready for the commitment. Owning a home means that you need to be prepared to take care of most of the maintenance and arrange for repairs. That can be time-consuming and stressful in some cases.
You need to be in a frame of mind that allows you to handle the stresses of homeownership, whether a pipe bursts in the middle of the night, or whether you feel like mowing the lawn each week so that your property doesn’t run afoul of your HOA regulations.
Another consideration is whether or not you are ready to put down roots in a specific community. If you know that you will probably move in the next three or four years, it might not make sense to buy a home. For the most part, buying a house you plan to use as your primary residence is about creating emotional ties in your neighborhood and community. Are you ready to be a part of the community? Or are you still interested in moving around a lot?
Getting rid of a house can be difficult when you buy. Selling can take a lot of time, and if you have to sell quickly and unexpectedly, you might lose a great deal of money. Not only can this be financially difficult, but it can be emotionally stressful as well.
Your Housing Should Match Your Life Goals
Don’t buy a house just because someone tells you that you “should.” Instead, take a look at your life goals and expectations. Will homeownership help you live the lifestyle you want? If you want to travel a lot, and have the flexibility to leave quickly, renting makes more sense. However, if you think you will stay in one place for a while and raise a family, buying a home could be a better choice.
Carefully think about what you want to accomplish with your housing situation, and talk it over with your partner. Then make a decision about whether or not you are actually ready to buy a house.