When is it too Soon to Buy a Home?

Buying a home often means taking on significant debt. If you’re already burdened with high debt loads, the last thing you want to do is add to them with a mortgage. Despite the low interest rate environment, a mortgage only makes sense if you can actually afford it. Even if you think you want to risk it, it’s very unlikely a bank will give you the loan you need if you have a high debt-to-income ratio.

The average person changes jobs 10 to 15 times in their lifetime. A promotion, career change or job transfer can necessitate a relocation. Often, you may have to move quickly, which means you might have only 30 to 60 days to sell your property. When you’re under pressure to sell your home, you may sell it for less than it’s worth. On top of that, closing costs can run into the thousands.

In general, experts indicate that you have to stay in your house for a minimum of five years in order to make it more affordable than renting.

Usually, the more you can put down for a down payment, the better. However, a good number to shoot for is 20 percent. If you put down less than 20 percent, you’ll be forced to pay for mortgage insurance. Many don’t have this kind of money, but that simply means you have a clear goal to save toward. As you save, you’ll build the discipline necessary to ensure that you’ll be able pay off your mortgage over the years.

Renters don’t have to take care of all the maintenance issues that can come with owning a property. Remember, if you don’t have the time or experience to make your own repairs, you’re going to have to pay someone to do it. If you don’t have extra reserve cash, you might be left unable to pay for emergencies, such as a pest infestation or a broken furnace. These are the hidden costs that can plague homeowners if they aren’t prepared.

Ultimately, owning a home is an admirable long-term goal, but be sure you know what you’re getting into before taking the plunge.