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Top 10 Reasons Not To Buy a House
Buying a house is one of the ultimate markers of success in our society, but rushing out to buy a house isn’t necessarily a smart move—especially with the skyrocketing cost of buying a home in most modern cities and seemingly consistent volatility in the global economy. Low-interest rates make mortgages look more appealing in areas where rent is extremely high, but here are 10 reasons why you should pause before you jump into the housing market.

Top 10 Reasons Not To Buy a House

1. Stability

This is obviously the biggest concern. The job market is better than it was in 2008 but it still hasn’t fully recovered, so if you lose your job you might not be able to find one in time to continue paying for your mortgage. Be honest with yourself—is your job really stable? Are you likely to get promotions and raises so you can enjoy your lifestyle while paying off your mortgage?

2. Other Debts

Student debt is higher than it’s ever been with many 20-somethings carrying a debt load of over $50,000. Using the money you’d spend on a down payment to pay off these debts is often a smarter move long-term.

3. Emergency Savings

No matter how stable your job seems and how likely you are to get consistent raises, you can’t account for every emergency. A serious illness or accident could leave you unable to work for an extended period of time. You should be thinking about putting aside 3, preferably a 6 months worth of your salary into an emergency savings account before you even think about a down payment.

4. Missing Other Investment Opportunities

The other thing you should have before you think about buying a house is a variety of financial assets. Once you’re making mortgage payments there will be less room in your budget for other investments. Having all your net worth tied up in your house is dangerous.
Many people get stuck in the mindset of investing in real estate and shares, however you might find that being open to other forms of investment can provide you with suitable returns without tying you down too much financially.

5. Repairs and Maintenance

As a renter, your landlord is responsible when things like the plumbing break down. As an owner, all of this is your responsibility—which gets expensive fast if you don’t know how to do it yourself. Even if you have significant emergency savings, you should still consider whether or not you want that responsibility.

6. Length of Stay

How long do you plan to live in the city where you are considering buying a home? If you’re likely to relocate within the next 5-10 years, buying a house probably isn’t worthwhile.  You’ll be stuck if you can’t sell it right away when it’s time to move.

7. The Volatile Housing Market

As more and more baby boomers have to move into retirement homes, their homes will start flooding the market. Young people who wait another 10 years will likely be able to choose between a wider variety of homes.

8. Mortgages Aren’t Always Cheaper

Yes, in some highly sought after areas it is cheaper to pay for a mortgage than it is to rent, but this is not true in a lot of areas. Do the math in the area you’re in to see which is actually cheaper.

9. Kids

Most of us generally don’t have an exact plan for when we’re going to have kids or how many we’re going to have. We can’t really predict the future. If you can’t afford a home big enough to fit kids, renting allows you to move into a bigger place more easily if you end up with twins! 🙂

10. Not Having Money For The Fun Things In Life

This is called being cash poor. If you’ve grown accustomed to the college student lifestyle you might think continuing to live this way is worth it so you can buy a great house, but you probably won’t still feel that way in five or ten years. It’s fine to know you’re stable enough that you’ll be able to make mortgage payments for the next twenty years, but if you’re not going to have money left over for the fun things in life it’s not worth it.
[RELATED: How to Pay Off Six Figures of Debt]

What do you think? Is it worth it to buy a house or not?

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