Owning a home is a huge investment and often comes with many associated costs, including a mortgage life insurance. Find out if you’re ready to be a homeowner today!
Home ownership is a rite of passage many of us dream of. Owning a home means putting down roots and having a space that is truly yours but it can also be daunting because of the obligations that come with it, combined with the initial process it takes to get there.
When done properly, though, buying and owning a home is a process that has many benefits, including:
- it limits your financial risk
- increases your investment power
- saves you money over the long run
- gives you increased control over your living space
- allows for an emotional investment in your community
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At 20/20, we understand just how big an investment a new home can be, which is why we offer flexible and affordable mortgage life insurance policies to help you protect your house and your loved ones through all life’s ups and downs.
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4 Signs You’re Not Ready To Be a Homeowner
There are certainly huge pros of becoming a homeowner and stumbling across a listing of your dream open can leave you thinking about little else. But don’t jump the gun and assume you need to buy a house right now!
From HOA fees and mortgage life insurance, owning a home comes with huge financial responsibility and here are 4 signs that, even if you think you’re ready to become a homeowner, you might not be:
1. You Don’t Make Enough Money
You might think you make enough money to buy a house, but before purchasing, you should crunch the numbers and see what your costs would actually be. To comfortably own a home, you need both:
- Upfront Money: This includes having enough for a downpayment and closing costs, and enough left over for an emergency fund.
- Ongoing Money: Your salary will need to be enough to pay for a mortgage interest and principal, homeowners insurance, and other fees. According to many financial planners, these costs should be less than 30% of your gross income.
2. You Have Too Much Debt
Perhaps you do have enough money to afford a home and your monthly mortgage payments but before you buy, you need to factor in any debt you might have. It’s important to take a hard look at your spending habits and change them in order to improve your chances of being able to support a mortgage.
Tip: If all your credit cards are maxed out, you may want to get your bills under control before entering home ownership.
3. You Don’t Have Enough Savings
If you’ve saved enough for the down-payment, you’ve made it over one of the largest hurdles of homeownership, but you need more than just that! As a homeowner, you have to remember that there are many costs associated with owning a house, including:
- Closing costs
- First few months’ mortgage payments
- Moving fees
- Decorating and furnishings
- Property taxes
Remember: While the downpayment is one of the largest costs of home ownership, you don’t want to drain your savings on it.
3. You’re Not Ready To Stick Around
Many experts recommend that you don’t buy a home if you aren’t prepared to stay in the area for at least the next 3-5 years. This is because if you want to sell your house within the year, you’ll likely lose money as appreciation won’t catch up to the closing costs and post-purchase expenses during that short time.
Additionally: If your job is in limbo, or you’re planning on moving to be closer to family in the near future, it’s wise to hold off on buying a home.
