When to buy a house?

**disneysteve** · 07-14-2015, 10:50 AM

Originally posted by ExcuseMyIgnorance View Post

I'm 25. I've been thinking about buy one. But I really don't know when the right time would be.

my elders are encouraging me to jump on.

Your elders are 100% wrong.

The time to buy a house is when you need a house and are financially prepared to do so.

I wouldn't buy a house unless you know you will be there for a bare minimum of 5 years and I'd lean more toward 10. You need to have a 6-month emergency fund and be able to make a 20% down payment.

As a young single guy, a house is probably the last thing you need right now.

**dczech09** · 07-15-2015, 05:24 PM

Never base your financial decisions on external forces or social pressures. This is especially true when it comes to home-ownership. You should buy when you are ready to, both emotionally and financially.

You might be thinking "hey, I can get a mortgage with a payment that is a little less than my rent." However, that is faulty thinking. Remember, when you are a home-owner, you are responsible for maintenance and upkeep. On average, you will spend about 2% of the home's value each year on maintenance costs. And that is just to MAINTAIN its value; not home improvement!

Do not try to mathematically justify taking on a mortgage really early. It cannot be done. Taking on a mortgage is an emotional decision, not a logical one.

Before taking on a mortgage, I recommend meeting these criteria:
1. Become debt-free on everything else (or at least very close to it)
2. Have an emergency fund of about 6 months worth of expenses
3. Save up a good down-payment so you can have a 20% equity position when you sign
4. Stick with a 15 year fixed conventional mortgage
5. Make sure your mortgage payment is no more than 25% of your monthly income

Do not rush into things. Who cares what interest rates are today and where they are going. Wait until you are ready

**97guns** · 07-15-2015, 06:42 PM

both my brothers bought their first homes at an early age, several years younger than yourself. they had their first real jobs and little savings, my mom helped them both with the down payment. it worked out well for them and to buy a house as soon as possible is a recommendation i can make.

the sooner you can buy a house and pay it off the sooner you can retire

**ExcuseMyIgnorance** · 07-16-2015, 01:30 PM

Originally posted by dczech09 View Post

Never base your financial decisions on external forces or social pressures. This is especially true when it comes to home-ownership. You should buy when you are ready to, both emotionally and financially.

You might be thinking "hey, I can get a mortgage with a payment that is a little less than my rent." However, that is faulty thinking. Remember, when you are a home-owner, you are responsible for maintenance and upkeep. On average, you will spend about 2% of the home's value each year on maintenance costs. And that is just to MAINTAIN its value; not home improvement!

Do not try to mathematically justify taking on a mortgage really early. It cannot be done. Taking on a mortgage is an emotional decision, not a logical one.

Before taking on a mortgage, I recommend meeting these criteria:
1. Become debt-free on everything else (or at least very close to it)
2. Have an emergency fund of about 6 months worth of expenses
3. Save up a good down-payment so you can have a 20% equity position when you sign
4. Stick with a 15 year fixed conventional mortgage
5. Make sure your mortgage payment is no more than 25% of your monthly income

Do not rush into things. Who cares what interest rates are today and where they are going. Wait until you are ready

Thanks. But 20% down will take a lot of time to save up. Plus, if I could invest that money instead for a better return than what I could pay for a mortgage - shouldn't I just get a bigger mortgage? 20% should mean no PMI though I think.

When to buy a house?