To Buy or Not to Buy: When it Makes Sense

Buying a home can be a great experience, especially first-time buyers. Indeed, few physical possessions rival the tangible and intangible value that a home provides to its owner(s). But there are times when the dream of home ownership must yield to more practical concerns. Here are some considerations to keep in mind when deciding whether or not now is the right time to buy.

Reasons not to buy a home

Do you have plans to move soon? If you have reason to believe you’ll be needing to move within the next 1 to 2 years then you might want to put off buying a home. The reality is that buying a home is not a trivial expense. There are moving costs, costs to furnish the home, closing costs associated with the loan, etc. It’s hard to recoup these costs, not to mention truly settle in to a home when the clock is ticking down to a move-out date in the near future. If you know you’re going to have to move, renting is more practical until you’re ready to stay put on a more extended basis.

Is there uncertainty with you job or career? If you have reason to believe your job is not secure or that you may be changing jobs then you should reconsider plans to buy a home. The same applies for situations involving a relocation or career change. Sure, a new home would be nice. But the change that comes with a new job or change of career could have a drastic effect on where you need to live…unless you don’t mind commuting to another side of town, or even worse, another city or state altogether!

Recent bankruptcy or damaged credit. Most loan guidelines require that a borrower with any kind of bankruptcy wait at least 12 months before being eligible for a mortgage loan. A similar situation exists for cases of bad credit. Most underwriters will want to see that a borrower has recovered from whatever factors contributed to the delinquencies. Plus, most loan guidelines gave minimum credit score requirements, which means that only time and on-time payments will bring your credit scores to where they need to be.

Reasons to buy a home

Change in family size. Whether you’re planning on having kids soon, or the kids are heading off to college soon, the amount of space afforded by your current home might not make sense for your anticipated family situation. It’s quite common for middle-aged and older couples to downsize once the last of the kids have ‘flown the coup’. Conversely, that 1-bedroom bungalow that served you so well as newlyweds just won’t be big enough for the two of you…plus one. An anticipated change in family size is a good example of when it makes sense to move.

Relocation or job change, post-facto. If there is absolute certainty of the need to move or relocate due to a job or career change then what better time to move? No one likes long commutes. All the time and money spent on gas would be better invested in more worthwhile things, like yourself and your family. So do yourself a favor and find a place that’s close to where you have to work. You and your family will appreciate the extra time you save from not having to commute on a daily basis.

Improved credit. If your previously bad credit has improved to the point that you now qualify for mortgage financing then go for it! You deserve the joy of home ownership as much as the next guy or gal. Just be sure to shop around before committing to any one lender, unless you have the benefit of a referral from friends or family. Being able to finance a home is one of the many rewards of having good credit.

Buying a home may or may not make sense, depending on the reality of your situation. Only an objective analysis of your particular situation will tell you whether now is the right time to buy a home. If after careful consideration you decide that now is simply not the right time to buy a home then don’t worry: there’s always tomorrow.

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