4 Reasons Owning a Home Isn’t Right For You

The Non-existent Down Payment

HouseToday’s lenders want the utmost assurance you are serious about your investment, so they require a sizable down payment prior to loan approval. Most lenders are looking for 10-20% of the home’s price to serve as the down payment, and if you haven’t saved that amount, don’t plan a purchase anytime soon.

If you are considering buying a home someday, start saving now. Calculate how much cash you can allocate toward that purpose and divide it by a price range you can reasonably afford. This will give you an idea of how long you will need to save up for an appropriate down payment.

Related: Mortgage Calculator 

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Failure to Account for All Expenses

Fixing HouseAn important aspect of homeownership is the responsibility that comes with it. You may be able to afford your mortgage payment each month, but you also have to consider the other expenses with owning a home.

This includes the cost of insurance, maintenance, taxes, and repairs. If something major goes wrong and you do not have a financial safety net, you could be asking for a lot of problems in the near future, which may result in the loss of the house you just bought.

Again, saving money is the key to being able to maintain a home for the long haul. If you can’t make ends meet as it is, you’ll likely end up in debt.

Related: How A Self-Employed Writer and Single Mom Bought A House

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The Questionable Credit Profile

New houseCredit is a big deal, and mortgage lenders are not as flexible as they once were, as they are only willing to loan money to those who are able to repay it.

If your credit history shows otherwise, you may find it hard to get a loan at a decent interest rate, if you are able to get approved at all. The good news is that credit histories can be improved, but it takes time. When you've decided that a home purchase is in your future, you'll need to make an effort to look like a trustworthy borrower.

Lenders are looking for credit scores of 730 or higher in order to offer reasonable loan terms and approvals.

Related: Find the Best Mortgage Rates

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Settling or Selling?

Moving outIf you cannot be certain that you are staying in the same place for at least five years, you might want to consider waiting on a home purchase. Unless you are independently wealthy, you should solidify some kind of future plan.

Selling a home soon after a purchase will likely leave you losing a lot of your investment when the initial closing costs and the eventual selling costs are considered. With an unstable housing market, you cannot predict the selling potential you’ll have in the short-term.

Related: 3 Mistakes To Avoid As A First-Time Homebuyer

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In Conclusion

Go HomeBuying a home may be the single most costly investment you will make in a lifetime. While it has been a part of the American dream for a long time, not everyone is cut out to be a homeowner without a lot of initial thought and preparation.

Homeownership leaves a lot to consider, especially if you are a seasoned renter. It may be easy to call the landlord when things go wrong, but as a homeowner, all the responsibilities will be on your shoulders. Be sure you are ready to take on such a weight physically, financially and mentally.

Related: 6 Smart Ways To Beat Mortgage Debt

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