Here Are 4 Ways to Tell if You're Actually Ready to Own a Home

Owning isn't right for everyone at every stage of life -- and that's okay.

If you're a renter, you might be itching to get a mortgage loan and buy a home sooner rather than later. This is certainly understandable, but given the high costs of homeownership, I'd urge you not to rush into a home purchase. Examine your motivations for buying and your actual life carefully before taking the plunge. You don't want to end up stuck underwater on your mortgage or taking on debt to pay for home repairs if renting is actually a better fit for you right now. If you can say "yes" to the following four conditions, you can go into a home purchase with more confidence that you're making the right move.

1. You're not planning to spend a ton of time away from home

This is not to say that you must be a total homebody if you aspire to homeownership. Plenty of homeowners take regular vacations and spend time away from home, and can manage to meet their maintenance and upkeep obligations. But if you're preparing to take a six-month sabbatical from your job and go backpacking through Europe, you might want to rethink buying a home right now. Why pay a mortgage and related costs now if you can save money by renting until you get back?

2. You have a lot of money saved

One of the best things you can do for your peace of mind and your finances is to go into a home purchase with as much cash saved up as possible. Not only will you save money on mortgage insurance and possibly your interest rate by making a larger down payment, but if you have money set aside for emergency maintenance and repairs, you can avoid going into debt when something inevitably goes wrong with your home. Give yourself the best chance of success with homeownership by saving as much financial cushion as possible.

3. Your career and personal life is stable

One of the reasons my first home purchase years ago was a mistake was that my work life was in no way settled and I needed to relocate a lot for my old career. I ended up losing my job in that city and going through a divorce just a little more than two years after buying the home.

Learn from my mistake and ensure that your career and personal life are as stable as possible before you consider buying a home. Of course, no one can predict the future, but if your marriage is rocky or you're feeling as if you might want to change careers sooner rather than later, wait to buy. You don't want to get stuck selling a house in a hurry (or worse, having your bank sell it for you because you can't afford it anymore).

4. You love the area you live in

Finally, it's important to be really sure about the place where you want to buy a home. After all, it's not as if you can just pick up a house and move it on a whim, and selling a home is much more difficult than breaking a lease. Plus, you're more likely to lose money on selling your home if you haven't lived in it for long.

Remember, it's not free to sell a home; you'll have to pay a real estate agent's commission and closing costs to transfer ownership, and you may even owe taxes. So if you sell before you've got significant equity or before the home has had a chance to appreciate in value, you could find yourself in the red. Be as sure as you can about the home you're buying, as well as the area it's in.

You never know what life will throw at you, but if you don't meet the conditions above, rethink that home purchase you're considering and try renting a home until you are more sure about how you want your future to look. Your finances will thank you.