Buying Your First Home? When Is The Perfect Time?

Many ponder the question, "When should I buy a home?" Buying a home is one of the biggest, if not the biggest financial decision you will make in your lifetime. That being said, the decision should be made at the right time. But when is the perfect time?

You must remind yourself that nothing is perfect. There is not perfect time to buy a home, but there is a good time in which you can. There are a few things you must think about first before jumping head first into home ownership.

The first thing being the down payment? First time home buyers are under the misconception that they have to have 20% to put down for a down payment. This is not true. It is possible to get a mortgage for as little as 3% of the purchase price. It really just depends on your credit and which mortgage company you speak with. There are many factors that can come into play.

If you do put down less than 20 percent, you will be required to buy mortgage insurance referred to as PMI aka private mortgage insurance. This policy basically protects the lender if you default on your mortgage. First time home buyers can be a bigger risk for mortgage companies.

Not only should you consider a down payment and PMI but one should also consider all that comes with home ownership. Unlike renting, all of the cost fall on you as the owner. If something breaks, you must fix it at your own expense. When renting you get the luxury of having the management company take a hit on the expense. You must ask yourself, am I ready to take on all the risk of homeownership. Do not forget thought that with risk comes reward, equity.