Don’t buy a home just yet if these things apply to you.
Many people are eager to buy homes these days. Even though property values are high, mortgage rates are sitting at attractive levels, and that’s pushed a lot of people to go out and make offers.
But before you move forward with home buying plans, you’ll need to make sure you’re really in a good place to take on the financial aspects involved. And if these three situations apply to you, it could really pay to wait.
1. You don’t have any money in emergency savings
You may have enough money to put down 20% on a home or to make another down payment that a mortgage lender will accept. But if making that down payment will leave you with little or no money in emergency savings, then buying a home could end up being a dangerous move.
When you own a home, you could face a host of unplanned expenses, like sudden repairs, extra maintenance costs, and rising property taxes. It’s important to have an emergency fund with at least three months’ worth of living expenses before taking that leap.
2. You don’t have a stable job
You don’t necessarily need to have the highest-paying job to get a mortgage. But what you really should aim to have before buying a home is a steady job — one you’re not worried about losing in the near term. If that’s not the case, then you may want to consider holding off on purchasing a home until you’re able to secure a better job or until things settle down where you work now.
Imagine if you were to sign a mortgage, only to lose your job a few months later. At that point, you might struggle to keep up with your payments and put yourself at risk of losing your home, all the while damaging your credit score in the process.
3. You’re really stretching your budget to afford a mortgage
Maybe you can technically afford to pay a mortgage every month, plus cover the additional costs associated with owning a home. But if doing so will really strain your budget and leave you with little room left over for other expenses, then you may want to put your plans on pause.
Generally speaking, your housing costs, including your mortgage payment, property taxes, and homeowners insurance premiums, …….