Today, owning a home has been seen as the financial pinnacle for most individuals. After all, home ownership is widely considered as the biggest and most significant investment you would ever make, so it would be understandable why so many people would consider this as their primary investment goal.
While owning a home has been regarded as a keystone of wealth and stability, there is one thing that most people fail to factor in before buying it: actually being able to afford it. Unfortunately, with our common sense and rational thinking clouded by the desire of owning a home, we tend not to read or even disregard the signs. We would respond mostly to the call of our supposed financial goal regardless of whether we can actually afford it or whether it is actually practical to do so. Indeed, while become a homeowner sounds glamorous, living all your life to pay that mortgage is not. Do not immediately jump the gun and think that you are ready for this next milestone. No matter how pretty that house looks like in Pioneer Woodlands, the fact remains that you may not be even financially capable of affording it. In any case, here are some of the glaring signs that you may not be ready to buy a home just yet:
1.) You do not make enough money
So you recently got an increase and think you are now financially capable of buying a home. Not so fast, however, you need to do the math and determine what your prospective costs would be. Remember, you would not only be paying for your home’s price tag and monthly mortgage. You would need to consider various utility bills, home insurance and a myriad of other actors as well. Take a gander at your finances first. Take note: Just because you can pay the down payment does not mean you can already afford the home.
2.) You have way too much debt
So, you have done the math, and you have found that not only can you afford the house’s down payment, annual insurance payments, and monthly mortgages, but you can pay the monthly bills as well. Unfortunately, this still would not make for a compelling case wherein you are already financially able to buy that house. You need to consider how much debt you have and if most of your credit cards are maxed out, you might want to take care of those first before adding another potential debt to your list. Reevaluate your spending habits first before you commit to buy a home. Improve your relationship with money so that you can increase your chances of being able to pay your mortgage.
3.) You do not have enough savings
If you have saved enough to afford the down payment, then good for you. However, this does not automatically mean you can already buy the home. Evidently, you are going to need far more than that. How else would you be able to maintain your home and spend for any emergency repairs that you might need? If you have just enough to pay the down-payment, then you might want to reconsider buying a home for now.
4.) You are still new at your current job
Mortgage lenders tend to favor individuals who have job stability—in the sense that they have been working the same job for at least twenty-four months. Being new to your job decreases the chances of your mortgage being approved as more often than not, they would calculate your income based on your job history for the past couple of years. So, if you are a fresh hire or
if you recently went through a significant job change, wait a while until you can finally buy a home.