Buying a home and later defaulting is one of the worst problems that can happen to an individual and their credit. It is just a hundred times better for a buyer not to buy than to buy and then end up losing the home. If a home is lost, then thousands of dollars could be lost from the bank taking the equity the home had built up in it. Quick and common sense reasons to not buy might be no savings, bad credit, lots of debt, unstable job, or simply the fact that renting is cheaper. Here are five more reasons why not buying might be a better option.
The first reason why an individual should not purchase a home is if they are a person who likes to or has to move around constantly. Maybe a person is just plain restless, or maybe the job honestly is trying to find the best fit for their executives and has to move them around constantly. Whatever the reason might be, a home has high costs at closing and takes some time or ownership before the market increases enough for the owner to make a profit from selling the home. Just take a look at the prices at the standard HDBs in Singapore at www.hdb.gov.sg/cs/infoweb/homepage, and a typical new condo launch at www.rivercove-residences-ec.sg. The price differences are glaringly obvious.
The second reason why a person should not purchase a home is if the current relationship they are in is on the rocks. A divorce is almost always extremely expensive. Homes cost money. They take time to build equity and to be able to turn a profit. And most of all, they take a job to earn money and allow for time, and a lot of times hard feelings cause job loss or other life changing crisis’.
The third reason why a person should not purchase a home is if the real estate market is on the decline. During this last home crisis, many people experienced conditions where their home lost over thirty percent of their value. When a home is the most expensive thing that a consumer will ever buy in their life, and they are fully expecting the real estate value to increase, it is quite a horrid shock when the value plummets and leaves them thousands and thousands of dollars in the hole. Make sure that home prices are stable and just slightly increasing in value as they should.
The fourth reason why an individual should not purchase a home is if they are constantly on the road or out of state. The actual home often depreciates because things go wrong. The walls crack, the roof leaks, the paint chips, etc. and so a home needs someone to live inside or be around enough to upkeep it. If the owner is always gone, then it is better for them to rent and have the landlord worry about the upkeep.
And fifth, if everyone else is buying a home and they are pressuring you to do, that is not a reason to buy a home. Everyone’s situation is different, and not everyone should be getting into a home. In many cases, home ownership is a great idea, but as already outlined, there are several situations where it is better just not to buy.