If you have read some of my posts you may know that I am somewhat against buying a house.
I feel that it is something that people are ill informed about. They then go and make an emotional decision that will impact their lives for years to come.
And let’s not forget that the word “mortgage” means “until death”.
People buy more house than they can afford. They have not done their homework on all of the extras that come with home ownership.
- unexpected emergencies
The other problem is that people think that if they extend the amortization period they will have lower payments and thus can afford a more expensive house.
What they fail to realize is that they are going to be paying thousands more in interest over the life of the mortgage.
Okay, all this being said there is a right way to buy a house.
You have to put at least 15% down. Preferably more. Zero down or 5%? Forget it. You’re not ready.
Really assess your housing needs. Buy a smaller house. It will be easier to heat.
Think about buying a house that a bank has foreclosed on. You MAY save thousands by doing this. I paid cash for a house this way.
Buy a house with an apartment in it or the potential for an apartment. This can help tremendously in paying your mortgage. I rented out rooms in my first house. It was the only way I could be a home owner.
Make extra mortgage payments. There are different types of mortgages that allow extra payments. You end up paying the loan off faster thus saving thousands in interest payments.
Set up your payment schedule for “accelerated bi-weekly” You end up making an extra payment per year. This shaves a few years off the life of your mortgage.
I get the allure of owning a home. Just remember that you don’t own it until it is paid for. Your job is to pay your house off as fast as you can.
Purchasing a house that you can actually afford and following the tips above is the right way to buy a house.
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