Why Not to Buy Now
The reasons not to buy a home are certainly fewer than those on the plus side of the ownership ledger. That's because, generally speaking, buying the place where you live is an excellent move. But sometimes, “now” is not the best time.
For example, one man in his early thirties attended a homebuying seminar in Texas. He was going to be married in the next twelve months, he was qualified for a mortgage, and was in the process of buying. But, after reviewing his income, debt-to-income ratio, and other financial considerations, he decided he was not ready to purchase a home. He cancelled the contract, prepared a budget, and began saving for a down payment and closing costs. According to Bettye Banks, vice president of education for Consumer Credit Counseling Service of Greater Dallas, this difficult decision to postpone the purchase will likely prepare him and his new wife to choose a home and a mortgage they can afford without the financial stress they might otherwise experience.
If you are in any of the following situations, you might want to put off buying, at least for the moment:
You do not plan to stay in a home at least three years. If you sell too soon, all of the costs attached to selling one place, buying the next one, and then moving will mean that you take a loss. This is particularly true in times when annual housing appreciation is slight or nonexistent. If you are transferred frequently in your job, or you know that you will be leaving an area soon, you may want to continue renting until you can expect to stay in one spot for a while.
You are saving every bit of spare cash to start a business or to study for a graduate or undergraduate degree. In these cases, it is best to put homebuying on the back burner until you can free up more money.
You regularly make significant and expensive purchases. You may need to make some sacrifices to be able to afford a home. Not many house hunters have unlimited budgets. You may have to put off purchasing the expensive stereo equipment, hold down other credit-card purchases, and, in general, retrench and save. Careful spending is the key to homeownership.
You want to buy an expensive property fairly soon. You should become even more serious about saving money. For example, forget the lavish wedding you had planned and have a smaller one, depositing the extra funds in your house account.
You truly do not have the money for a down payment and cannot carry a mortgage payment, no matter how many tips are offered in these pages. If this is the case, you should continue renting for now. A mortgage lender will be able to see that you are stretched pretty thin and, therefore, would be unlikely to grant you a loan. Keep trying, though, and saving, and one day you will be handed the keys to your own place.
