Deciding to buy a new home can be exciting and freeing- and for many people, it’s the mark of a new beginning, a fresh start taking them closer to their dreams.

However, a new house is a big responsibility, and it’s a decision that requires thorough thinking. Keep in mind that investing in properties will have a significant impact on your finances and future. And if you’re not well-prepared for the changes coming your way, you might lose your investment.

Take note that a house mortgage is a long-term commitment. It would require you to have a reliable financial standing. But that’s not all; it would require you to make sacrifices and changes in your life more than money.

So how will you know if it’s not the right time to buy a house? Listed below are the common signs that literally say “not now.”

Low Credit Score

Your credit score will state how worthy you are of mortgages. It is commonly based on credit reports and how well you pay your bills. If your credit score is too low, you might need to delay buying a property in the meantime, as it might only leave you heartbroken.

To give you an overview, credit scores from 300 to 689 are considered bad and fair, whereas credit scores from 690 to 850 are good and excellent. Aspiring house buyers should aim to reach 700 or above to get the best interest rates.

You’re Buying a House for the Money

Many people think that buying a home for money is a wise move. But given the inflation, taxes, and other expenses, it’s not pretty ideal to think of it as an investment, especially if you’re planning to monetize the property.

Wise home buyers don’t look at their target house and lot with a financial plan. Instead, buy a home because the neighborhood is safe, or it’s close to your parents’ house. Avoid thinking about how to save or earn money using the property.

30% of Your Monthly Income Goes to Bills

Ideally, your monthly bills and expenses should not consume more than 30% of your income. If that is the case, you are most likely not ready to buy a house.

Forcing yourself to buy a house even though money is tight will only put you in complicated situations. Worst-case scenario, you might even have to give up a few things like your car to make both ends meet.

You Don’t Have Emergency Funds

Buying a home might be your goal, but preparing for emergencies should be your goal too. You’re not ready for a new house if you don’t have any reliable emergency funds in your account. Things do happen. And unfortunately, they take place in the ugliest times of our lives.

emergency fund

Losing a job and getting sick happens to a lot of people. And while you might be trying to stay positive, it wouldn’t hurt to put yourself in these challenging situations sometimes and determine if you’ll be able to pay your mortgages if things like these happen. Suppose the answer is no; start an emergency fund first before buying a home.

You Don’t Have Savings

Let’s get one thing straight, savings and emergency funds are two different things. And for you to get a home approval, you need to have both.

If you don’t plan to live your whole life paying bills and working all day and night, you need to have savings. It’s a fund you can use to achieve your other goals in life, like traveling the world, starting a business, or adding a new member to the family.

Besides, having savings means that your cash flow is in excellent shape, which is a good indication that you’re ready to buy a house.

You Can’t Afford the Down Payment

In general, many developers don’t require buyers to pay a down payment for their purchased properties. However, you still need to assess the situation. If you cannot afford to spend at least a 10% down payment of the total contract price, it’s wiser to reconsider things.

You Have Big Plans for the Following Years

As mentioned, buying a house is a big responsibility, and it’s a commitment that you need to face. If you’re planning to get married the following year in luxurious venues or send your sibling to college, you might need to delay buying a house.

The best thing to do is know your priorities. Avoid achieving all at once. Focus on what’s most important to you and accomplish the rest later on.

Lastly, make sure to talk to some professionals who can give you valuable advice and recommendations. Talk to a financial advisor if you have any concerns about money. Or you can call a real estate agent to find out the requirements to fulfill to get approved for a home loan. Learn the process first so that you will not waste time or money.

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