Are you interested in buying a house but aren’t sure you can afford it? Here are five signs you should watch out for that mean you’re about to buy something you can’t afford:
1. There are creative mortgage terms in your loan. If the conditions of your financing look like a trail mix of mortgages and involve terms like “interest only,” “balloon payment,” “second mortgage,” or “adjustable rate,” that’s a significant indicator that you can’t afford the home you’re looking to buy.
2. You’re relying on down payment assistance programs. These can be helpful if used properly. However, if you’re not prepared for the financial aspects of purchasing and owning a home, moving into one before you’re ready, or moving into one you can’t afford without the assistance, will do more harm than good.
3. You have just enough to cover the monthly mortgage payment. There will always be additional expenses to owning a home, so you want to have extra money set aside for any surprises that might pop up.
4. You’re borrowing from a retirement account.
5. You have a sinking feeling. We always say that no matter what anyone else says, trust your gut. If you don’t feel 100% sure you can handle the investment, wait until you are 100% sure.
At the Amy Wengerd Group, we have a thorough consultation with you and one of our favorite lenders to make sure you’re comfortable in your price range and are accounting for any additional expenses that will most likely occur. We want you to be happy when you move in and for many years to come.
If you have any questions about this topic or you’re thinking about buying a home, give me a call and let one of our buyer specialists show you how easy and fun this process can be. We’d love to help you.