3 Things to Consider When Buying a Home
Jun/091
There’s nothing like owning a home. Now, we all can’t have houses like Adam’s, with a built in game that can take us anywhere we want to be, but we can find a place where we can hang our hat, build some equity and raise a family.
That’s one of the reasons that many people leave the land of renting and take the plunge into home ownership, but let me advise you of a few things before you take the plunge:
1. You will not always be making what you’re making now.
Sure, the mortgage broker will tell you how much of a house you can afford based on the amount of money that you make. They’ll even stretch it on the high end because they plan as if you’ll have the job that you currently have, or better down the road.
They’re counting (just as you are) on raises, on inflation, and on the fact that if you were to lose your job, you’d find something that would pay you about the same.
So, it’s in your best interest to understand this and plan to have a big down-payment, to have a good emergency fund, to buy a house much under what you can afford—or any of these three.
2. The more that you can put down, the better it is for you.
If you look at the fine print of any house purchase what you will find is that if you mortgage most of the cost of the house you’ll be paying double the purchase price back to the bank. You won’t even really start to make a dent on your mortgage until after the first five years.
That’s why it’s important to be able to pay as much as possible up front (not to the expense of your emergency fund!) so that you’ll be able to save all that money that you will just be throwing away in interest payments.
3. Double it up, if you can.
A great strategy when you’re first married or still single is to get roommates or buy a multiple family house. Not only will you be getting money from the other tenants (which can pay for the mortgage all in itself), but you can move out and keep the building as a money maker and an investment.
Whether you’re looking at tulsa real estate or something closer to Adam and Noah’s Oregon home, keep these three things in mind!
Enjoy this article?
Leave a comment
No trackbacks yet.
7:07 am on June 4th, 2009
I recommend that couples base their buying power on ONE income and that being the smallest of the two. That way they can use the second income to pay down the debt and build up the savings and they will have a cushion in case a job is lost (or one chooses to leave) in the future.
Also – picture this – when you sign a mortgage you are agreeing to be in debt to the bank until you have grandchildren!