Taking on the responsibility of home ownership is a big feat—expenses pile up quickly, and creating a home for yourself and/or your family is a stress of its own. There are some circumstances in which attempting to buy a home would be extremely complicated and difficult. Financial, emotional, and mental preparedness are essential to successfully become a homeowner; consider the following elements of that preparation as you decide whether or not to buy a home.
Lack of Cash
To sellers in a high-competition market, cash offers are definitely more appealing than mortgage offers; a cash offer assure the seller that they will get the money upfront, where financing is considered “iffy”… if financing is denied the buyer, the buyer may have to back out, which is very frustrating and inconvenient for the seller. If you do not have the cash capital to appeal to sellers, and will have to rely (unsteadily) on financing, you may have a more difficult time with sellers accepting your offers. Lack of cash may be a red flag to sellers that your financial status is shaky, meaning they may prioritize cash offers over yours.
It is possible to buy a home with poor credit, just a challenge to get “okayed” across the board. If you choose to finance your home, you may have a hard time getting mortgage lenders to give you a loan. That doesn’t mean you are out of hope though! According to Chris Murray Home Loans, an FHA loan is backed by the federal government and requires a lower down payment. Mortgage companies may also look at your income statements, debt record, and available money for a down payment, and if these numbers are promising you have a better chance of them agreeing to do business with you. If you do have bad credit, it is helpful to have a good amount of cash!
Big Life Changes
If you are experiencing a big life-change, buying a home becomes a considerably bigger challenge—family or marital separations, serious illnesses, or career changes all require time and attention (and, of course, are financial commitments themselves that may make large expenses concerning. According toMoney Under 30, you should work with financial advisors to determine how to budget and manage your money, and create a timeline for doing so!
If you have a lack of cash, poor credit, or are in the middle of a significant life-change, consider the stresses that becoming a homeowner could create for you and determine whether or not you feel comfortable or confident investing in such now.
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