Are you ready to buy a home? If you have weighed the financial concerns and feel that you are, there’s one more question to ask.
Why do you want to buy it? If your answer is one of these five reasons, you will be wise to wait. Here are five wrong reasons to jump into home ownership:
1. Everyone Is Doing It
Even if it feels like everyone you know is a homeowner, that does not mean homeownership is right for you. Your best friend or brother does not have the same financial and credit situation you have.
Other people do not have the same questions about job stability or the realities of a pending move in the future that you might have. You must look at your own financial situation, and use that to determine if homeownership is right for you.
2. Renting is “Wasted Money”
Have you heard that renting is like throwing money in the trash every month? That is a bunch of nonsense.
Yes, renting does not represent a financial investment for your future, but it still offers you the chance to have a roof over your head. That, in and of itself, is valuable. Renting is not wasted money; if you are not ready to buy a house, you should not start the process.
3. You Found Your “Dream Home”
Everyone has a “dream home,” but the reality is that your dream may not be the right situation for your current financial or living needs.
Once you have decided that you are ready to move towards home ownership, then by all means find a “dream” that is within your budget, but do not decide to move solely because of a house you see that you fall in love with.
This is the recipe for making poor financial decisions. There will be other houses, and there may even be better houses if you wait for the right time.
4. Interest Rates Are at All-Time Lows
How often have you heard in the last five years that interest rates are at all-time lows, and you had better buy now before they go up?
Yes, interest rates are low, and yes, those who bought homes in the 80s or 90s cannot believe how common they are, but that does not mean they will shoot up to 15 to 20 percent in the next year.
Sure, waiting could mean the difference between a 4 percent loan today and a 6 percent loan next year, but in reality, you will be better off if you wait until you are financially ready to buy.
5. You Feel Pressure
Buying a home when you feel pressured is another recipe for bad decisions.
If you feel pressured, find an affordable rental option and sit back for a few months. Homes will still be there when the pressure is off, and you can make wiser choices about your home purchase.
Buying a house can be a favorable financial decision, or it can be a disaster. If you buy for one of these reasons, take a step back. You may be in a better position if you wait.
If you are buying for another reason and are sure your finances are in order, then go ahead. Your dream home is waiting!