The Right Reasons to Buy

So if none of these myths are a good reason to buy a house, what is?

First and foremost, you have to want to be a homeowner. It doesn't matter what your parents think or your friends advise or your tax guy suggests. If you aren't ready, you aren't ready.

That was the case for Richard in Raleigh, who wrote me about an article I wrote for MSN on the home-buying myths.

“I am getting tremendous pressure from my tax advisor and other folks to purchase a home, but after reading your column, it is for all the wrong reasons,” Richard wrote. “Clearly, I am not ready to purchase a home, and this article helped solidify my decision.”

If you can answer yes to the following questions, buying a home can make sense:

I plan to stay put at least three years and probably more. In a typical market, it can take three to six years for a home to appreciate enough to offset the costs of selling and moving. If you're in a particularly hot market—one that might be ripe for a price drop—your desired time frame might be even longer, since it could take many years for prices to recover.

I'm psychologically prepared. Renting is like dating, home ownership is like marriage, and not everyone is cut out for wedded bliss. Even if you can unclog your own drains, you'll still occasionally have to call a plumber, as well as take responsibility for all the other chores your landlord handles now.

I have some extra savings. It's a rare first-time homeowner who isn't shocked by how much money she spends on repairs, maintenance, and decorating in the first years in her home (not to mention how much time you spend at Home Depot!). Those who drained their savings buying the house can find themselves going deeper and deeper into debt. You'd be much smarter to make sure that after the deal closes, you still have savings equal to at least two months' worth of mortgage payments, and preferably much more.

I manage my money pretty well. That “forced savings” aspect mentioned earlier works only if you can resist the temptation to drain your wealth with home equity loans and lines of credit. If you're carrying credit card debt now, and you're not quite sure what's happening to all the money you make, put off your house search and clean up your financial house first.

Otherwise, you'll wind up like some of the clients that Kevin, a financial planner, sees in his Atlanta practice.

“One of the most eye-opening aspects of starting my practice and having prospects and clients share their financial secrets with me is the horror I see when folks get caught in the perpetual cycle of trading equity in their home to pay off consumer debt,” Kevin wrote. “When I see how so many folks are highly leveraged with home equity lines of credit or interest-only loans, I think to myself, 'They might as well be renting.'”