10 Signs You're Not Ready to Buy a Home

While home ownership is one of the cornerstones of the American dream, moving from renting an apartment to buying a home involves a major commitment. In addition to the monthly expense of a mortgage, homeowners face added responsibilities that can include hundreds of hours of work and thousands of dollars in expense. Before you find yourself saddled with a 30 year mortgage and a ton of housework, consider the following 10 signs that you're not ready to buy a home.

1) You have a lot of debt. For most people, buying a home means taking on more debt. While most financial advisors believe a home mortgage is "good debt," student loans or significant credit card debt might make it difficult if not impossible for you to buy a home. If you don't have enough money to put down a 20 percent down payment and spend less than 30 percent of your income on a mortgage payment, you might want to wait before getting your new home. While your current living arrangement may not be ideal, losing your house through foreclosure could be far more traumatic and damaging to your credit.

2) You are thinking of changing careers. If you're thinking of changing jobs or heading off on a new career path, it's probably not a good time to buy a house. While all change involves a degree of risk, it best to limit your exposure to one change at a time.

3) Your job isn't secure. If the rumor mill is warning of a layoff, it's probably a good time to hold off on buying that new home. While it may amount to nothing, finding yourself in a new home without a job will make the experience uncomfortable at best. Before you set off to find your new castle, wait until the horizon is clear and your job is safe.

4) You're thinking about getting married soon. Unless you really want to test the limits of your marriage, wait until after you're married to buy a new house. Aside from the financial requirements, choosing a home should be a team effort. No one wants to enter a marriage where all the decisions are being made for them. Before you sign on the dotted line, wait a year for the dust to settle.

5) Your career requires periodic relocation. If you know that you'll have to relocate to advance in your career, hold off on buying that new home. While many companies offer support in selling your house when you take on a new job, you may find the stress of trying to manage two homes through the transition more than you want to deal with.

6) You're not ready to be tied down to a mortgage. Even though your mortgage payment may be about the same as your rent, it's definitely not the same thing. While rent generally covers your entire commitment to your housing needs outside of utilities, a mortgage is just a payment on a loan. If your house goes down in value, you're still responsible for the outstanding amount, not to mention the fact that you still have to pay for repairs and taxes.

7) You can't afford to buy a home in an area you like. In high demand areas, it sometimes makes more sense to rent than buy. While you may end up spending more money over the long run, renting in a downtown area can often be cheaper in the short run because you can adjust to your needs more easily. While you may want to be near the entertainment area now, you might long for the suburbs once you're married. Rather than tie yourself to an area for years, consider renting until you know what suits your needs best.

8) Your marriage is on the rocks. A new house is rarely the solution for a bad marriage. If your relationship is struggling to survive, consider holding off on a new home. It's far easier to divide up cash in a divorce than it is to divide up a home, especially if children are involved.

9) You don't like working on stuff around the house. When you own your own home, you are responsible for making all the repairs. You are also responsible for cutting the grass, raking the leaves, and cleaning the gutters. While you can hire someone to help with these tasks, you'll end up paying far more than if you are renting. Worse yet, most home repairs come out of the blue. If you don't have a financial cushion, a frozen pipe can end up putting you deeper in debt.

10) You aren't willing to change your spending habits. If you are like most people, owning a home means you'll be spending less money dining out, visiting friends, or going out to the bars. If you are not ready to make the transition to becoming a homebody, sow your wild oats a little longer and wait to buy a home.

Buying a home isn't for everyone. While it was once considered a great investment, many financial advisors now consider home ownership an expense. Rather than sink your money into an asset that requires painting and repair, consider using a diversified portfolio of stocks and bonds to guarantee your future.

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