Three Tips to Avoid Buying a Home Above Your Means
August 31, 2016 11:15 am
Being house poor is a problematic financial situation. Buying a home you can afford will put you in better economic standing for decades to come. Homeowners will enjoy many important financial advantages as a result of purchasing a house comfortably in their price range. You can avoid being house poor by keeping a few key principles in mind when shopping for a new home. These are:
- Spotting emotional reactions to properties
- Take time to get accurate financial figures
- Communicating honestly with your real estate agent
Shop Without Sentimentality
Making financial decisions based on emotions is a sure way to land yourself in a disadvantageous position. When people feel positive emotional reactions to homes or properties, they are more willing to spend above their budget. Take note of sentimentality and other emotions that come up during the shopping experience; make an effort to think more critically as a result.
Do the Math
While a banker can tell you what kind of home loan you might qualify for, you will still need to do your own calculations to determine how much house you can afford. A good guideline to stick to is to multiply your annual income by 2.5; this will provide an estimation of how much you can afford to spend on a home without putting yourself at a major financial disadvantage.
Let Your Agent Help
Your real estate agent will be your most important ally during the home buying process, so it is important to communicate honestly with them. Be up front about how much you can spend and about the price range you are willing to consider. These specifics will help an agent identify properties that are most likely to suit your needs and tastes.
Experience Makes a Difference
The Levine Homes team is made up of some of the most experienced and dedicated agents in the business. We really care about helping each client find the property that exactly suits their needs, lifestyle, and budget.
