4 Reasons to Put Off Homeownership Right Now

Here's when buying a home isn't a great idea.

There are plenty of good reasons to want to buy a home. First of all, there's something to be said for owning a place of your own, as opposed to paying rent every month so your landlord can pay off their mortgage and attain financial stability.

Also, owning a home gives you more freedom. You don't need to abide by a landlord's rules and you can make changes to your home as you see fit (though in some cases, you will need approval from your town for certain renovations).

But while you may be eager to become a homeowner, here are some reasons to sit tight and continue renting for a while.

1. You don't have enough money saved to make a 20% down payment

You don't absolutely need a 20% down payment to get approved for a mortgage. But if you don't put down that much at closing for a conventional loan, you'll be hit with private mortgage insurance, or PMI.

PMI is insurance that protects your mortgage lender in case you fall behind on your home loan payments, and it can be up to 1% of your loan amount. This means that if you take out a $300,000 mortgage, you might pay another $3,000 a year, or $250 a month, in PMI. And that's an expense you may want to avoid.

2. You're not sure about your job

Having a steady job is an important step to becoming a homeowner. If you're not sure yours fits that bill, or if you think you may want to leave your job in the near term, then delaying homeownership is a smart move.

If you move forward with a home purchase and then lose your job soon afterward, you might fall behind on your mortgage payments. That could damage your credit score and put you at risk of losing your home if you skip too many payments.

What's more, if you're miserable at work, buying a home could put you in a situation where you're forced to stay where you are to cover your mortgage payments. You're better off waiting until you're in a long-term, steady job to start looking at homes and making offers.

3. You're not finding homes that work with your budget

In today's housing market, home prices are extremely inflated. The result? You might pay a lot more for a home now than you normally would. This also means neighborhoods that were once affordable may now be out of reach.

If you're having a hard time finding a home that fits your budget, then waiting to buy is the responsible thing to do. If you push yourself to spend more on a home than you're comfortable with, you might fall behind on your mortgage. And even if that doesn't happen, you may find yourself in a world of financial stress just to keep up with those payments.

4. You're not finding homes that suit your needs

Because housing inventory is so limited these days, buyers can't afford to be super picky. Still, you may have some basic requirements for a home, like a certain number of bedrooms or a decent-sized backyard for your kids to play in.

If you can't find a property that suits your basic needs within your price range, then waiting to buy is a better move than settling for a living space that doesn't work for you. This especially holds true if you're reasonably comfortable in your rental and can stay there a bit longer until housing inventory opens up.

You may want to buy a home sooner rather than later. But in some cases, waiting is the better bet. Be honest with yourself about whether it pays to hold off on buying a home so you don't make a decision you'll later regret.