It’s important to understand when to buy a house – and when not to. If any of the following applies to you, it might be wise to stick with renting for now.
You Don’t Have An Emergency Fund
You’re responsible for fixing anything that breaks down when you own your home. If you don’t have an emergency fund, you may quickly find yourself struggling with debt. Ideally you should have an emergency fund that covers at least 3 months’ worth of living expenses before you think about getting a mortgage.
You Have A Lot Of Debt
You don’t need to be debt-free to buy a home, but too much debt can make it more difficult to get a loan. More debt can also make your loan more expensive because you’ll be less likely to get the best interest rates. Create a plan to work down your debt before you take on a monthly mortgage payment and all the expenses of homeownership.
Your Income Isn’t Stable
You need a stable and reliable income to buy a home. Career stability (being at the same job for a minimum of 2 years with no immediate plans to leave it) means you can anticipate how much money you’ll have coming in every month. With a steady income, you’ll be able to get a more accurate idea of how much home you can afford. If you just started your job or you’re thinking about making a career switch soon, you might not be ready to buy a home. Wait until you're comfortable and stable in your career before you make a commitment to a mortgage loan.