Quote:
|
Originally Posted by safari
If you don't think you can afford to buy a house, don't do it! Just continue renting and saving money. The house might happen sooner than you think.
|
I'll second that! Homesellers, agents, and lenders will all try to sell you the biggest mortgage they possibly can because the more you pay for the house the more money they make.
In my case, I had a lot of debt but was paying it off rapidly because of a new better-paying job. When circumstances forced me to move, I made a firm decision that my total monthly house payments (including escrow) couldn't be more than $xxx because any more than that would cut into my "minimum-required-payment margin-of-safety" too much. I was also acutely aware that every dollar I devoted to buying a house would make it take longer to repay my big CC balances. So I stood firm on my max monthly payment figure, but it wasn't easy.
Given the max monthly payment I was willing to make, I was limited to houses under $60,000. Everybody involved told me I could easily qualify for a $90,000 house and would have a lot more houses to choose from if I accepted a bigger mortgage.
Bottom line: I bought a $55,000 house in a nice lower-working-class neighborhood. One year later the tech bubble burst! I lost my job and had to take one that paid a lot less. It was a real struggle just to make ends meet during the next two years. If I'd had a bigger mortgage it would have sunk me! I now have a job that pays as much as my old one did and I'm starting to make progress on my CC debts again, but the only thing that kept me afloat during those hard times was my prudence in limiting my house shopping to a monthly payment I
knew I could really afford.
What has happened, can happen (and given Murphy's Law it probably will.) So
never take someone elses word for how much you can afford to spend, unless their figure is lower than yours. The people you've seen buying houses they really can't afford haven't figured that out yet.