5 Reasons Not to Buy a House and 5 Reasons You Should
Everyone refers to buying a home as the American dream. It is most people’s dream to one day own their own home or space. However, if you buy before you are ready, your home can quickly drag you down and make you house poor. It is important to buy a home for the right reasons when you are ready, and not just because it is expected. Here are five reasons you should not buy a home and then five reasons why you should.
These reasons are what you should think of if you are trying to decide if you should rent or buy.
5 Reasons Your Shouldn’t Buy a Home
1. Pressure from Other People
When you reach a certain age or start a family or get married, the pressure may be on you to buy a home. Family and friends may have expectations that it is time to buy a home and settle down. It is important that you are ready and stable enough to buy a home. Until you and your spouse (if you are married) both feel ready to commit to buying a home, you should not give into pressure to buy a home.
2. You Plan to Move
If you know your job will transfer you every other year, you may be better off renting rather than buying a new house in each area that you live. If you know that you want to settle somewhere else or save up to afford a better neighborhood, you may be better off waiting to buy a home so that you can be comfortable. The rule of thumb is to buy a home if you plan on being in the area for at least five years.
Owning a home makes it more difficult to move or cope if you are laid off from work.
3. You Qualify for a Mortgage
The bank may be willing to lend you money for a home, but that does not mean you are ready to own one. It is a good idea to address any spending and debt issues before you buy a home. This will prove to yourself that you can handle the budget.
Take the time to save up a down payment and really get control of your finances so that you can really afford a home. Even if you can qualify for a mortgage with the easier terms the banks are offering, it does not mean that you are really ready to buy.
If you are carrying large amounts of debt, you really should not buy a home. People getting in over their heads and taking on risky mortgages was part of the reason the housing market collapsed in 2008. If you are carrying a lot of debt, you should take the time to pay it off before you buy a home. This way your home will not become something that you resent or holds you back.
5. Home Repairs and Fixer Uppers
Another reason to keep renting is that you do not need to worry about the maintenance that goes along with home ownership. If you are busy or stretching your budget to be able to afford your home, chances are you will not be able to cover home repairs and annual maintenance costs. Additionally, if you travel a lot, it may be difficult to care for the yard throughout the year.
5 Reasons You Should Buy a Home
1. You Are Ready
Purchasing a home is a big step. Many people are nervous to make such a large purchase and take one the financial responsibility and the cost of upkeep.
However, if you are ready both financially and emotionally, you should take the step to buy a home. A home can give you security and a place to feel safe.
2. Building Equity
One of the best things about owning a home is that they tend to go up in value over time. The housing market is volatile, and there is no guarantee that you will make money over a five or even ten-year period, but over thirty years, the value of the home tends to go up. Additionally, you can take the money that you paid toward your house and put it toward retirement when you decide to downsize when you retire. You can also use the equity to help you move to a nice home.
3. You Are Secure in Your Job
If you are fairly secure and certain that you will stay put for at least five years, it is a good idea to buy a home. When you continue to rent, you are just throwing money away instead of building equity.
This means that if you stay for at least five years, you will have money save in the equity to go for the down payment on your next home.
4. Tax Break on Mortgage Interest
The first few years of paying on your mortgage, the majority of your payment will go to paying on the interest. You can deduct a percentage of your interest from your taxes. This can help you reduce the overall amount that you pay in taxes each year. It is an additional perk to owning your own home.
Everyone gets to the point where they want stability in their lives. Owning your own home gives you a set neighborhood, schools and community that you can call your own. It is important to think about what type of environment you are buying your first home in so that you can provide that stability when the time comes.