Advice
3 signs you are not ready to buy a home
24/04/2019 16:25 | Source: Forbes
According to American financial expert Dani Pascarella, if any of the three scenarios below apply to you, it’s very likely that home ownership will make your life a lot more stressful than happy.

Sign #1: Buying home makes you become poor

You can get approved for a mortgage doesn’t mean you can comfortably afford it. You spend so much money on your new home each month that you can’t afford to do the other things you want like traveling, having a social life, or even saving for retirement.

Pascarella says your monthly housing costs shouldn’t exceed 28 percent of your total income. What will your monthly household budget look like after your purchase? Can you be comfortable to live on that budget? 

Home buyers' mistakes

Sign #2: You don’t have any emergency fund

After the home purchase, you should have an emergency fund with enough cash to cover at least 6 months of expenses. 

Most home buyers going to their local realtor’s office are ready to buy the moment they have enough money saved for the down payment. But in fact, they should be saving a lot more than that. Otherwise, owning a home is going to be extremely stressful because you’ll always be one random repair away from credit card debt.

Sign #3: You can not be flexible for future plan

In case you can’t commit to staying in the home for at least 5 years, then think twice before buying a home. Just imagine if you got the job opportunity of your dreams or met the love of your life but they were in another city. If you were renting a home, you could seize the opportunity at a very minimal cost by subletting your apartment or even breaking your lease contract. However, if you own a home, following your heart to another city will likely come with a hefty price tag. 

When you buy a home you are hoping that your home value appreciates and that you build equity. It usually takes a significant amount of time for both of these things to happen. Therefore, if you sell just a couple of years after you buy, all of the closing costs that you paid up front usually outweigh any appreciation that’s taken place.