ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Is It Time To Buy A New Home?

Updated on October 3, 2012

With housing prices dropping and interest rates remaining low many people are considering purchasing a new home, either for the first time or as an upgrade. But is now the best time for you to make a major purchase like that?

Buying a new home is a major purchase that will have a direct affect on your personal finances for many years. Are you ready to make that commitment? Only you can answer that question.

Here are some things you need to consider before you can answer that:

1. Can you afford to make a considerable down payment without borrowing? The greater the down payment you make the less your mortgage will be.

Professional financial advisors suggest you pay a minimum of 20% down when you purchase a new home. Some lending institutes may even require a down payment of 20% before they will give you a mortgage.

The catch here is that you should be able to make the 20% down payment without borrowing the money. This is cash you have on hand for this specific purpose.

2. Can you afford to make the payments? You can secure a mortgage for as much as 30 years if you want to - that's a lot of monthly payments. Are you secure enough in your job to commit to this?

Personal financial advisors suggest that no more than 40% of your monthly income should go towards debt - this includes credit cards, bills and the mortgage. Can your job support this? Does your work leave room for promotions and raises?

3. Do you know where you want to settle? Purchasing a new home is usually considered part of a long-term plan. Do you know where you want to live for the next 10,20 even 30 or 50 years?

Of course, selling your home in the future is an option but it could be an expensive option. If you don't have your mortgage paid off when you want to sell then there will probably be hefty fees involved. If the housing market is in a slump you may loose money when you sell or you may not be able to sell your home as quickly as you want to.

4. What is the purpose of the home? What type of home do you see yourself needing in the future? Do you plan on having a family? How many rooms will you need? How many bathrooms?

If you are purchasing a home that you expect to put a family into you will have different needs than a home for a single person. Although, you could always purchase a home with the plans of upgrading in the future if you need to - but this could get expensive.

There are other factors to consider as well before you purchase a home but these are the big ones. You need to be able to afford it. You need to be able to put a sizeable down payment down. You need to know where you want to settle long-term and you need to know what type of home you will need.

If you take the time to honestly answer all these questions you will have a better idea if purchasing a home is something you want to do now. For some people it may make more sense to wait until they are in a better financial situation before buying.

Don't take on more debt than you can handle. It is very hard to climb back out of the debt trap once you fall into it.


    0 of 8192 characters used
    Post Comment

    • Jean Rogers profile image

      Jean Rogers 

      6 years ago

      Great article. I like the emphasis on waiting until you have 20% down and being in a stable financial situation before taking on the debt and commitment of a mortgage. I gave the article a thumbs up because I hope thousands of people will read this and consider your advice.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)