When you're deep in the throes of a house hunt and you find a place you really like, it's easy to get caught up in that excitement. But are you about to purchase a home that costs more than you can really swing? Here's how to know.
Start your journey to financial success with a bang
Get free access to the select products we use to help us conquer our money goals. These fully-vetted picks could be the solution to help increase your credit score, to invest more profitably, to build an emergency fund, and much more.
By submitting your email address, you consent to us sending you money tips along with products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Statement and Terms & Conditions.
1. You'll end up spending more than 30% of your income on housing
As a general rule, your housing costs, including your monthly mortgage payment, property tax bill, and homeowners insurance, should equal no more than 30% of your take-home pay. If you'll exceed that threshold, then you may want to rethink that home purchase.
To see what your home will cost you each month, use a mortgage calculator to figure out your monthly home loan payments based on the property's purchase price, your down payment amount, and the interest rate you think you'll qualify for. You can also use a mortgage calculator to see what your peripheral costs, like property taxes and insurance, might look like, but keep in mind that those figures may not be as accurate as your mortgage payment itself. To get a more accurate read, see what taxes are noted on the property listing and get quotes from homeowners insurance companies.
2. You're offering a lot of money above a home's asking price
These days, a lot of homes are being listed for higher prices than they normally would. Low mortgage rates are causing an uptick in buyer demand, and there's not a lot of inventory to go around, which means sellers can get away with asking for more money.
It's one thing to pay a seller's asking price, but it's another thing to make an offer that's well above it. Now in today's real estate market, you may feel pressured to go well above asking to get your offer accepted. But going that route could propel you into overspending on a home -- and regretting it afterward.
3. The home has a lot of features that will be costly to maintain
No matter how large or small your home is, you'll need to spend money maintaining it. But certain features may cause you to spend a lot more on upkeep, making your home too expensive for your budget.
If your home has a swimming pool, for example, you could spend thousands of dollars each summer to keep it in good shape. Similarly, if you buy a home with an oversized backyard, you may spend a lot of money on lawn care and landscaping. Consider the cost of maintenance along with your mortgage payment, property taxes, and insurance -- because upkeep is unavoidable.
Buying too expensive a home can have consequences. It can cause you financial stress, push you to fall behind on other bills, or, in a worst-case scenario, result in foreclosure if you reach the point where you can't keep up with your mortgage payments. Rather than run that risk, err on the side of being financially conservative when buying a home. Remember, there's always the option to upgrade your home down the line, but don't start off with a home that's a stretch from the start.
"expensive" - Google News
August 16, 2021 at 06:00PM
https://ift.tt/3g6OZec
3 Signs You're About to Buy Too Expensive a Home - Motley Fool
"expensive" - Google News
https://ift.tt/2GwwnlN
Shoes Man Tutorial
Pos News Update
Meme Update
Korean Entertainment News
Japan News Update
Bagikan Berita Ini
0 Response to "3 Signs You're About to Buy Too Expensive a Home - Motley Fool"
Post a Comment