Buying TOO MUCH house?
by Karen Dunn
There's the old saying "don't bite off more than you can chew". It goes without saying that if you do just that you may end up with more than you can swallow. Truth is, 25-30 years ago home buyers were encouraged to buy more house and max out their pre-approved lending amount. In today's society this action can have disastrous effects such as less money to:
- Save for a retirement
- Take a vacation
- Save for college
- Enjoy things outside of mortgage payments
At worst, buyers simply can't afford the payments on their homes and end-up in foreclosure or bankruptcy. Buyers must first understand their financial situation to know what their budget will comfortably allow. The key is to then find a home that fits within that financial limit and to not exceed the limit.
In short, a general rule of thumb is to add up all your housing expenses (mortgage payment, homeowner's insurance and property taxes) and ensure these don't exceed 28% of your gross monthly income (ideally). At Bayou City Lights Properties, we encourage and educate our clients on making smart decisions when buying their homes. Contact us today as we would like to be your company of choice when it comes to your next lease or purchase!
Did you know ?
that the amount of your homeowner's insurance premium is determined in part by your credit score, your history of filing claims and the claims history on the house you wish to purchase? Knowing the claim history of the home you want to purchase is important not only due to insurance rates but it also gives you a glimpse into the past for potential future problems. Bayou City Lights Properties agents are ready to assist you in making informed decisions on your home purchase. Please call us today and allow us to assist you.
Bridget Crowley, CIPS, CNE, GRI
