6 Signs It's Not Time to Buy a House

#1 Do You Make Enough?

You might make enough on paper to qualify for a mortgage for a home you want, but do you really make enough money. You can often qualify for more home than you can really afford. Keep in mind that any time you do a mortgage, you have to pay closing costs and come up with a down payment. Owning a home also brings maintenance costs, and some of them can be expensive, such as problems with the roof, plumbing and electrical. Plus, whatever your mortgage payment is, you will need to pay annual property taxes, home owner's insurance and mortgage insurance.

When you are looking at buying a home and the mortgage payment, make sure you take into account all of these extra expenses.

#2 Do You Have Too Much Debt?

Perhaps you do have enough income to make your mortgage payments and all of the associated additional costs of owning a home. But you have to factor in your other debts. For example, if you have most of your credit cards maxed out, you will probably want to get those paid down as low as possible before you apply for a mortgage. Most lenders want to see that your total debt load is less than 36% of your gross monthly income. If you have a lot of consumer debt, you will want to look long and hard at your spending habits before taking on the burden of a mortgage.

#3 Do You Have Enough in Savings?

Saving enough money for a down payment is one of the big hurdles of getting a mortgage. But you will need to have more in the bank. What if the roof starts to leak? What if the AC or furnace fail? Would you have the cash to pay for it or would you have to take on debt to pay for it?

You also should have enough cash in the bank to make a few mortgage payments if you are unable to work. Remember that moving can cost several thousand dollars. Plus, you will probably want to decorate the new home and buy new furniture. So, there is more to think about than just the down payment.

#4 Have You Been Working Long Enough?

Most lenders today want to see that you have been in the same job for 24 months, or at least in the same industry for that period. If you are self-employed, they want to see that you have been in business making profits for at least two years. They will calculate your income based upon your 24-month job history. Being on the job for at least two years shows income and job stability. But if you have changed jobs or been unemployed in the last two years, you could have trouble getting a mortgage. Even if you can, you should think about whether you want to have the obligation of a mortgage when you are having instability with your income.

#5 Do You Have Credit Problems?

If you have a credit score well under 700, it can indicate some problems in terms of missing payments and/or having too much debt. Take a close look at your score and credit report before you think about applying for a mortgage. If you have late payments or a lot of debt, lenders will take a long, close look and may turn you down.

Also, if you have no credit history, it can be harder to get a loan, but not impossible. FHA approved lenders cannot turn you down simply because you do not have a credit history. You can use an alternative credit history that can be established with on time rent payments, utility bill payments, etc.

#6 Are You Ready to Settle Down?

You generally should not buy a home if you think that you will need to move in less than three to five years. You are likely to lose money on the deal if you move too soon because the appreciation of the home will not exceed the closing costs.

References: https://www.trulia.com/blog/should-i-buy-a-house-7-signs/