I get a ton of questions from people strategizing how to best buy a house:

How much should I save for a down payment?”

“How do I know what I can afford?”

“What sort of mortgage should I get?”

“What’s the deal with income tax?”

For now, forget all of those questions. The first question you should be asking yourself is: self, is buying a house the best money move for me, at all?


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I get it. A house is more than bricks and wood (or whatever houses are made of these days). A house is a home. You want to nest. Again, I get it. But if you want to really feel at home, your house should not put you in a financial prison. People break the bank over housing all the time because they assume buying a house is the right financial move. And it can be! But it’s not for everyone.

Not to mention, the housing market is still totally upside-down because of the pandemic-related shifts, like people being able to work remotely indefinitely, wanting more space to work from home, feeling safer in lower-density populations. Frankly, if you’re looking to buy a house, now is a pretty crummy time.

But if none of this has fazed you, there are three things you need to say “heck yes” to before even considering buying a home:

You Can Afford It

I mean, can you really afford it? Typically you need 20% of the cost of the house in cash for a down payment.

You can’t look at home-buying in a vacuum. If you have a bunch of credit card debt, don’t even think about asking me how you are going to buy a house. There are more important things to think about on your priority list! You need your debt gone-zo, emergency fund ready-to-roll, then and only then, can we have the home-buying discussion.

You Are Going to Live in It for a While

Life happens unexpectedly. I mean, this pandemic is pretty clear evidence for that.  If you have a strong hunch you’re going to need to move soon, or that you’ll need cash soon, you shouldn’t buy. A house is an asset, yes, but it’s an illiquid asset. Meaning, it’s hard to “melt” into cash when you need it.

You Have a Steady Job That You Love

Job uncertainty makes for terrible timing to make an investment this enormous. Whether you’re unhappy in your job, or these crazy times put your job in jeopardy, the bottom line is: if you’re in the market for a new job, you should not also be perusing the housing market. If you don’t have a steady job, you should be leaving the door open (pun intended) for any opportunity that might come up— which, should you take the job, might demand moving.

So, how’d we do? Did we check all three golden rules? If so, then mazel tov! Go forth and shop around— and stay tuned for more articles about mortgages, closing costs, and all that jazz.

If you did not check all these things off, you should not buy a house right now. And that’s okay! Just because you’re not positioned to buy a house right this second, doesn’t mean that you never will. It also doesn’t mean that you’re financially insecure. Stick with me, and I’ll get you in house-buying shape in no time. Until you’re ready to take that step, you can enjoy not being your own landlord. Trust me, that’s enough to make “home sweet home” very sweet indeed.

By Nicole Lapin, Contributor

© 2020 Forbes Media LLC. All Rights Reserved

This Forbes article was legally licensed through AdvisorStream.

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Edward Downey
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Downey Financial Group
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