Are you sure that you are ready financially?
Considering the vast number of people losing their homes right now, I have to wonder how many of these people should have even purchased homes in the first place.
Or if they had the means to purchase homes, perhaps they should have purchased a smaller, less expensive home.
As an example, here is a little about our home buying experience…
Others Will Try To Influence You To Buy More House
When my husband and I were home shopping, our Realtor insisted that we were buying a home beneath our means. According to our calculations, we thought a home for $200,000 would allow us to own our own home and also live very comfortably.
Our Realtor, on the other hand, thought we were being ridiculous. Based on our income, we could easily afford an exclusive home in a gated golf course community for 3 times what we were trying to spend.
All we had to do was “look at the math more creatively”. We could “get an interest-only home loan with a low initial payment”. We could “wait for the house to appreciate, then refinance the loan”. We “would certainly have a higher income in a few years, and the payment would not be a problem”.
How many people have purchased a house based on such advice from a Realtor?
In addition to the pressure from our Realtor (who I could only assume saw a large commission), we also got a great deal of pressure from my husband’s co-workers who, according to their home purchases, also agreed with the advice they were getting from Realtors who thought we were buying beneath our means, and into a lower classed neighborhood than we deserved.
What We Decided To Do In The End
While we did end up purchasing a bigger house than our first budget (based on our own numbers) would allow, we did not purchase anything close to what the Realtor and our friends thought we should own.
In retrospect, we made a good decision by not getting the expensive country club home that we would certainly be losing right now. We also probably should have purchased the less expensive first house we had our eye on in the first place.
Adjustable vs Fixed-Rate Mortgages
I have been a certified tightwad since I became pregnant with my first child and decided to find a way to stay home with him. I enjoy sharing my experiences in my journey back to financial health and planning for a future — which will include sending 2 kids to college and early retirement.