The Dangers of Buying a Home That’s Over Your Budget
Last time, we began looking a little at some of the ways those looking to purchase a home might need to check, in order to avoid making a hasty decision that isn’t the best choice for them. In our first article, we spoke to the temptation to purchase a cheaper home that requires a lot of maintenance work – something that’s great for those with the time and knowledge, but a different story for those without.
Today’s topic shifts the conversation in the other direction. As well as looking at costs that are too low and buying something that needs more maintenance than you are able to provide, many people make the mistake of buying over their budget and falling into an entirely different set of troubles.
“Honey, Call the Bank!”
The fact of the matter is that there are likely going to be very attractive homes outside of your price range. And, given the way the pandemic is reshaping things, there are possibly going to be very few homes to sift through at all.
With this in mind, it is key to not become desperate and then place an offer on a home that, when it comes right down to it, you cannot afford. Because, and it is important to be honest here, it is going to be better for you in the long term if you can stay patient and wait for a place you can actually afford than for you to make some unsound financial decisions and have the bank foreclose on your property after two or three years.
The first step to avoiding this issue is to have a candid and realistic conversation about your financial situation and what this means for your homebuying prospects. If you have a partner with whom you plan on purchasing the home, they should absolutely be involved in this conversation. If you don’t have a partner, consider asking a trusted friend or family member to help you look at numbers and think through the logistical side of things.
Yes, it is tremendously fun to imagine ourselves living in mansions, but to try and force this lifestyle into most lives is simply not possible at this time. Reframing expectations and desires to better reflect the reality of your financial situation will greatly help ensure that you don’t land in a puddle of trouble further down the road.