Home ownership is not always all it’s cracked up to be, or the American Dream. There are a lot of considerations that go into owning a home, and jumping into something that you are not prepared for is never a good idea. It is for this reason that you should make sure that you have all of your ducks in a row before committing to something. Home ownership is not for everyone, and sometimes renting can be the better option depending of several factors.
Low Credit Score
When you are getting your first mortgage, your credit score holds the reins on what kind of rate you will receive. It is often recommended to delay the purchase of your first home until your credit score will be able to work to your advantage.
Job Stability or Relocation
If you are not sure you are going to be in the same city for a relatively long time, it may not be in your best interest to own a home. There are multiple factors outside of your control such as job relocation, but most of the time you know where you will be in the short term. If you are not able to rent out your home, you will be stuck paying for an extra mortgage. If you sell your home, you will most likely be losing money on the transaction.
If you do not have the funds available to repair and maintain your home, it is probably a good idea to hold off until you have saved enough money. It is recommended to have a reserve fund of 5% of the purchase price of your home in order to make fixes and be prepared for emergencies that can result from owning a home.
As you can see there is a lot that goes into owning a home. If you are not prepared financially (and mentally), purchasing a home may not be the best investment. However, if you are prepared, owning a home can be a very rewarding and gratifying milestone in life.