October 30, 2012 by

Why I’m Not Ready to Buy a House

Home ownership seems to be on the minds of some of my bloggy friends, so I thought I’d weigh in on the topic.

I love browsing for homes. I check MLS daily, and I day dream about this perfect house or that perfect neighbourhood. I think about what’s important to me in a home, and what isn’t. I do all of this, but I’m in no way ready to own a home.

I guess I’ll blame it on my impatience, how I’m forever looking to the future and imagining what this will be like, or that. When I was in University, I couldn’t wait to graduate. Now that I’m out, I can’t wait to get out of debt. So, naturally, I also can’t wait to become a home owner.

Except that I’m going to wait, a good long time. Here’s why:

I’m Not Financially Ready to Own a Home

In my ideal life, I’d graduate from school and become a home owner within a few years. My house would be small but new and clean, and we’d all live happily ever after. In my alternate life, I’ve got a ton of debt to pay off. Now, I know that being debt free isn’t a requirement to be a home-owner  There are lots of them out there carrying massive amounts of student or consumer debt. My problem is, I’m very risk averse. My minimum debt payments right now are about 25% of my take home pay. Adding a house payment to that mix, even with the fiance’s income, would jack up our minimum debt payments higher than I’m comfortable with in this job market.

So, I’d like to become debt free first. I’ll just feel more secure knowing that all we have to worry about if one of us loses our job, is making the house payment, not the house payment plus my student loans plus the car payment. Being debt free will also give us a chance to get a better mortgage rate and more leverage when it comes to comparing rates.

Second of all, I don’t have a down payment. If I put a stop to my ridiculous extra debt payments, I could come up with a nice sized down payment pretty quickly, depending on where I’m looking to buy. But, as long as we’re dreaming here, I’d really like to save a whole 20% down in order to avoid having to pay extra for insurance. I don’t know if I’ll make it that far, but it’s a nice goal to aim for.

I’m Not Secure Enough in My Career to Own a Home

I haven’t even been done my undergrad for two years. I’m not sure that I’m going to stay at this job indefinitely, I’m not even sure I’m going to stay on this career path. Having a house at this point in my life would be a very big commitment to staying where I am. It’s not easy to sell a house, so if we ever wanted to move, the question of what to do with the house couldn’t be ignored.

I’m Not Emotionally Ready to Own a Home

I live in a 400 sq. ft. house, where I’m permanently house sitting for the owner. It’s the perfect situation for my fiancé and I. We get to have all of the benefits of living in a fully detached house, including a yard and gardens, but when something breaks, we can still rely on the home owner to help us fix it. In fact,  all throughout my apartment living life, every time something breaks, I can’t help but think “Wow I’m glad I rent.”

Home ownership comes with a lot of responsibility and cost. Fixing things when they break, worrying about when to replace the roof and even fretting over the state of the housing market. As much as I love the idea of buying a fixer upper and going all DIY crazy on it, I really think I need more stability in my life before making that kind of a decision.

The Good News Is…

If I give myself a few years to get out of debt, then a few more years to save up a nice, fat, down payment, I imagine I’ll be pretty damn sick of renting and ready to buy a house. By then, I should feel more ready than I do right now. Right now, buying a house is something fun to dream about, something that I’d like to do some day.

Are you a home owner? When did you feel like you were ready to buy a home? I want to know!

 This post was sponsored by tomorrowfinance.com

  • addvodka

    A house is a huge decision so it’s good you aren’t taking it lightly and jumping on the bandwagon.

    I’ve been emotionally and mentally ready to buy a house for years, but financially ready only recently (within a year). We’re looking but cautiously – the market in Canada is tricky and we don’t want to end up screwed over.

    • http://my-alternate-life.com/ Jordann

      The market in Canada is definitely tricky right now and I’m kind of glad I don’t have to navigate it. House sales are down but prices are remaining stable for now…they’ll probably drop off over the next few years. Interest rates are a whole other ball of wax to consider too. Hopefully the soft landing will make housing more affordable by the time I’m finally ready to buy!

  • http://www.uniquegifter.com/ Anne @ Unique Gifter

    Glad to hear you’ve got it sorted out for your own situation. You’ve got a sweet deal with your rent and I really, really like that you’re paying down your debt first! It’s also good that you recognize where you’re at with your career. If it was just me, we’d definitely still be renting, because my career has been slower to develop and is much less stable/repeatable elsewhere than my spouse’s.

    • http://my-alternate-life.com/ Jordann

      My career definitely needs to take on a more firm shape before I dive into home ownership. Right now I’m still testing the waters and figuring out if this is what I want to do with my life. I might take things in a different direction in a few years.

  • http://twitter.com/SenseofCents Michelle

    There should be no rush! A home purchase is such a big decision. We definitely rushed it since we both needed a place to live and houses are so cheap where we live.

    • http://my-alternate-life.com/ Jordann

      I’m kind of facing the same problem here. A three bedroom on a corner lot runs around $105,000 here, which is chump change compared to the national average. So it’s quite tempting to just plunk a couple thousand down and have a permanent place to live, but so far I’ve been able to resist that temptation!

  • http://www.momoneymohouses.com/ Mo’ Money Mo’ Houses

    I think it’s good you know you’re not ready, and really, what’s the rush? Something I’ve been trying to tell myself since I’m also not really ready but I’m kind of over renting already. We just learned that our neighbours in the suite next to ours are moving and they were so quiet and awesome, all because the people above them are loud jerks. Man, I can’t wait for that not to be a problem for me anymore!

    • http://my-alternate-life.com/ Jordann

      I think the reason its been on my mind is because all of my friends are home owners and most of them are of the opinion that renting is “throwing money away”, so I feel a lot like the black sheep of the neighborhood. Housing is really, really cheap in my area so most of them were able to buy homes very young. That said, I’m proud to be a highly flexible, renting black sheep!

  • http://twitter.com/SavvyScot The Savvy Scot

    It sounds like you have made a very sensible and calculated decision. You will have so much more room to breathe if you wait until that debt is gone (or nearly gone). Mrs Scot and I bought a house this year and it is worrying sometimes that mortgage payments account for almost 1/3 of our combined pay (without bills).

    • http://my-alternate-life.com/ Jordann

      That’s the other thing that gives me anxiety, knowing that if the worst did happen, that I’d still be tied to the property no matter what. I guess I’ll just have to make sure we’re really prepared when we finally do get into home ownership.

  • http://twitter.com/PlungedinDebt Plunged in Debt

    I wish we had waited a year or so longer. We sorta got sweet talked by a Broker friend…nothing we can do now though! Not a huge regret.

    • http://my-alternate-life.com/ Jordann

      I’m trying to stay away from people like that because I know I could easily be tempted into something I’m not quite ready for. Based on your post over at Canadian Budget Binder, it seems like you guys made the best of that situation!

  • http://twitter.com/RFIndependence Pauline

    You are being very wise, and if you are house sitting at the moment, you can enjoy the free rent to get a deposit ready!

    • http://my-alternate-life.com/ Jordann

      Exactly!

  • http://Www.Plantingourpennies.Com/ Mrs PoP @ PlantingOurPennies

    We bought around the time we got married – by then all student loans had been paid off for about a year, and we had built up a big enough financial cushion that we knew we’d need for all the renovations on our fixer-upper.

    • http://my-alternate-life.com/ Jordann

      I definitely want to get a fixer upper, which means we’ll need to find something cheap enough that leaves extra room in our budget for renovations – and a big enough cushion to deal with any serious problems that might come up, thanks for reminding me.

  • http://www.outliermodel.com/ OutlierModel

    I think you’re being quite smart by waiting for now. You are in a really good frame of mind to pay down debt, and you’re doing an awesome job of it from what I’ve seen. Having 25% of you pay go to minimum debt payments is a lot and even I (much less risk averse) would feel tight with a mortgage payment on top of that.

    CF and I are just bought our 2nd owned property and will be moving in next month. Five years ago, I didn’t think that I’d be ready to own my own place until at least 30 years old (I’m still 27). While there are definite responsibilities with property ownership, I couldn’t ignore the business case. By owning condos in an area where depreciation risk is low I’m willing to take on the risk.

    It’s less about being ready or settling down – I don’t feel tied to my property and wouldn’t hesitate to rent it out if I moved elsewhere or spent time abroad.

    • http://my-alternate-life.com/ Jordann

      Where I live right now (rural area) it’s hard to find renters, and houses can often sit on the market for six months or more, even though they’re fairly valued. If I lived in the city where renters are easy to find, I think I’d be less averse to buying.

  • http://twitter.com/CanadianBudgetB CanadianBudgetBinder

    You are very smart because every paragraph I read was one of a well thought out plan. At least you are thinking the smart way and not wanting everything “now” which can get lots of people into alot of trouble. I think you will be just fine if you stick to your goals because if I were you I’d do just the same, but that’s just me. Cheers Mr.CBB

    • http://my-alternate-life.com/ Jordann

      It’s great to hear you approve of my plan! I really respect you.

  • http://freeintenyears.com/ Free in Ten Years

    You have extremely low interest rates compared with the rates where I am – where the lowest is about 5.5% – but aside from that there are a heap of good reasons not to buy now, especially when you’re in such a good position with your housing at the moment. Absolutely no need to tie up heaps of money in a difficult to sell asset!

    • http://my-alternate-life.com/ Jordann

      Well said!

  • John S @ Frugal Rules

    Good post. My wife and I bought our first house about six years ago before we had our first child. I know we made some mistakes, but I wanted to be in a house before we started our family. I can tell that you’ve thought this through, which many do not do. In the end, you’re much further ahead because of it.

    • http://my-alternate-life.com/ Jordann

      Thanks! I’m trying to make the best decisions, I’m glad people agree with me.

  • http://twitter.com/DebtandtheGirl Debt and the Girl

    Good for you for thinking with you head and your wallet in regards to owning a home. Its not always as great as people make it out to be.

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  • http://www.vanessasmoney.com/ Vanessa

    I agree with everything in this post :D