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If they're able to save up for a down payment they can wait a little longer and save up a six month reserve.

dsfyu404ed 8y ago
It takes most people a lot more than 6mo to save up a 6mo reserve. Delaying a house purchase by a year or two is not a practical option for most people. You have external things constraining your timeline to buy.
- jartelt 8y ago
  Sometimes people do get put into situations where buying earlier than optimal seems like the only option. However, people often use a variety of excuses to buy a house simply because they want to buy a house (even if they don't have the necessary funds for risk management). -We are having a baby, so we need to move out of our 2 bedroom apartment and get a 3 bedroom house -Our rent is increasing so we need to buy a house (even though the mortgage is often more than rent) -We need a garage for our cars, so let's buy a house -We have money in our savings that isn't earning anything for us, so let's buy a house and put it to work. -We don't like sharing walls with neighbors, so we need a house. -Our parents say we are throwing money away at rent and should buy a house so we can build wealth. Each excuse has some validity to it, but none of them really mean you need to buy a house RIGHT NOW.
- gwbas1c 8y ago
  6 month reserve is not 6 months of income. It's 6 months of making basic expenses; and is much easier than most people think. - We (US) loose about 1/3rd of our income to taxes. These aren't paid when you have no income.* - A certain portion of income goes to retirement and saving for a rainy day... Well, you don't save for a rainy day when it's a rainy day. - Major purchases can be deferred - Major expenses, like vacations, can be skipped. - Some banks will let you switch to interest-only in hard times - ect So, roughly speaking, 6 months of reserve is much less than 6 months of pre-tax income. * If you have the misfortune of an extended unemployment, it will shift your tax bracket and you pay even lower taxes.
TuringNYC 8y ago
In an upmarket, In the meantime, the house goes up in price and you're even further away from owning the house and even more over-extended if you decide to bite-the-bullet and buy.

It takes most people a lot more than 6mo to save up a 6mo reserve. Delaying a house purchase by a year or two is not a practical option for most people. You have external things constraining your timeline to buy.

jartelt 8y ago
Sometimes people do get put into situations where buying earlier than optimal seems like the only option. However, people often use a variety of excuses to buy a house simply because they want to buy a house (even if they don't have the necessary funds for risk management). -We are having a baby, so we need to move out of our 2 bedroom apartment and get a 3 bedroom house -Our rent is increasing so we need to buy a house (even though the mortgage is often more than rent) -We need a garage for our cars, so let's buy a house -We have money in our savings that isn't earning anything for us, so let's buy a house and put it to work. -We don't like sharing walls with neighbors, so we need a house. -Our parents say we are throwing money away at rent and should buy a house so we can build wealth. Each excuse has some validity to it, but none of them really mean you need to buy a house RIGHT NOW.
gwbas1c 8y ago
6 month reserve is not 6 months of income. It's 6 months of making basic expenses; and is much easier than most people think. - We (US) loose about 1/3rd of our income to taxes. These aren't paid when you have no income.* - A certain portion of income goes to retirement and saving for a rainy day... Well, you don't save for a rainy day when it's a rainy day. - Major purchases can be deferred - Major expenses, like vacations, can be skipped. - Some banks will let you switch to interest-only in hard times - ect So, roughly speaking, 6 months of reserve is much less than 6 months of pre-tax income. * If you have the misfortune of an extended unemployment, it will shift your tax bracket and you pay even lower taxes.

TuringNYC 8y ago

In an upmarket, In the meantime, the house goes up in price and you're even further away from owning the house and even more over-extended if you decide to bite-the-bullet and buy.