I've been wanting to own my own home all my life, but I had some bad credit problems in the past due to a failed start-up business my husband was involved in. We have worked very hard over the past few years to improve our credit rating, and we finally have it high enough that we could get a loan. We have also managed to save up a fair amount, not quite as much as we'd need for a down payment but we are getting close. However, now I am not sure if I want to stay in the city I'm in long enough to make an investment like this. I know I don't want to buy until I am ready to commit to a city for a few years at least so I am still thinking things through. What else should I consider first? How do you know when you are ready to jump in to the world of home ownership?
That can be tricky especially if you've had issues with finances. I think after recovery the best thing is sit back, take a look at your priorities and if paying for the house won't in any way affect you then you can go right ahead and try to buy yourself a house but considering you aren't sure you'll be staying in that city for long, then it's best not to rush into anything. Actually the best way to determine whether you're ready to buy a house is money. Do you have enough for the down payment? If you do and you can easily manage [raise enough money] to make all other scheduled payments then probably you are ready to buy a house.
It sounds as if you've already done one of the most important parts... and that's building your credit rating again... (congrats, by the way... NOT a very easy thing to do!) Secondly, the down payment plays an important part. You'll want to "shop around" and see what your options are there... not every lender requires the same down payment... plus things like having been a veteran may come into play deciding on what kind of mortgage you want to take out. Out of everything you said, though, the thing that may be your determining factor is not knowing if you want to stay in the area or not. I'd personally wait until I was sure before going through everything that's necessary in order to buy a home. To answer your question... well, we knew when our landlord totally flaked out and became unstable. There was no way we wanted to rent again, so it didn't take a lot of discussion. A little sooner than we intended, but it worked and still here in the same place all these years later.
I think that when it comes to buying a house you not really limited to the city that she living in. It's really about making the investment. If the investment is right and is worth it then you should definitely go for it. If it happens that you are to move city you can always sell the property we can still keep it in rented out to other people. This will be a great source of income to you if you decide to go down this route. So essentially owning a property is the best thing that she could do for yourself and I believe that you will know when you're ready to make such a commitment.
Hmmm that's an interesting point lovemwaf, I hadn't considered the possibility of renting it out if I were to move. I'll have to look into that and learn a bit more about that to think through that one... my life has been in a lot of transition now so I won't be looking to buy until next year at the earliest. Hopefully by then I will know my long term plans a bit more, my life has been in a bit of turmoil this past year so I am not making any big moves yet, but planning for my future and trying to think through my options for the next few years. You guys have given me a lot of food for thought.
If you aren't basically 99.9% sure you want to buy a house, don't buy a house. Buying a house pretty much locks you down to an area and depending where you are selling it can be a pain in the butt, especially if your new job doesn't help with relocation or anything of the sort. Houses are expensive, HOA/property taxes are expensive, upkeep is expensive. It's worth it if you like the area and have a great job in a good field but you don't sound like that so I would recommend against it. If you're young and have no kids, ESPECIALLY do not buy a house. Job mobility is great if you want to keep increasing your earnings (company loyalty is long dead in most cases) and a house only makes things more difficult to pick up and leave.
I think the most important thing is to know for sure what city you want to invest in. Because that will help you decide if you should buy a house for short term investment or long term. And if you are not sure, you are definitely not ready. There's no need to force the issue. It just means you have more months to save. And that's a good thing. And while you are working out the "where", you should be saving money. The economy is still weak. People are still losing jobs or having their salaries decreased. I think when you are investing in something as expensive as a house, you should have enough money saved where if you are out of a job for a few months, you will still be covered. I think when everything comes together well -- you know what city you want to live in, you have a secure job, you have enough money saved, you have enough money for a down payment, your credit is good, and etc-- you will feel: it is time!
