How To Buy A House Debt Free

Most people dream of someday buying a house. We are brought up to believe that this is the way it should be.

I get it.

It is your own space. You are building equity in something that should appreciate in value over time.

But so many people make some mistakes when it comes to buying a house. It seems that they cannot wait to be hundreds of thousands of dollars in debt for decades.

So is it possible to learn how to buy a house debt free?

Possibly.

The True Cost Of Home Ownership

So you want to buy a house. You maybe go to a bank or mortgage broker and get pre-approved for a mortgage.(what does mortgage mean-it is Latin for until death). You start looking for houses in your price range and before you know it you are looking for houses a bit above your pre-approval amount.

Instead, you should really think of looking for houses below your pre-approval amount. Why? Well it is not just the mortgage payment you have to think about.

You have

  • house insurance
  • property taxes
  • utilities
  • never ending repairs and maintenance

Plus there is this little thing called life that you still have to pay for. Things like food, maybe a car payment, kids-if you have any, clothing. And on top of all that it would be nice to be able to save some money for emergencies and for retirement.

If you go out and buy more house than you can really afford you will be hard pressed to find the money for all of these other things.

Remember, life should be kept simple. We do not want to complicate things if we can help it.

But there are other ways to get into home ownership.

Let’s get to it- How to buy a house debt free.

Look for foreclosures– Unfortunately there are lots of houses out there that the previous owners could no longer afford to make the payments on. The lending company takes the house back and eventually will put the house on the market. Sometimes they will take a lot less than fair market value if the house has sat vacant for a while. You may be able to find a house for tens of thousands of dollars less if you are open minded.

Rent out rooms– This is not for the faint of heart. I did this with my first house and it kind of worked. For a while. Should you rent rooms to friends? I don’t know. There may be a falling out over something trivial. But if you rent to strangers, well, they are strangers. But the renters will be paying a lot of, if not all, of your mortgage.

Buy an income property – Maybe a duplex or triplex. You live in one unit and rent out the other units. “But I want my own space!” Yes I understand. This can be considered a short term option. If done right the renters will be paying all of the mortgage and you may be putting extra money away. Save that money up to buy a single family home.

Not everyone is cut out to be a landlord. Renters will be complaining a lot about things that need to be done. Are you handy? Or will you need to hire someone to do the repairs. And don’t forget that this “house” will still need regular maintenance like a new roof, heating system, etc., over time.

So many people get themselves in over their head when buying a house. They get caught up in the moment. A year down the road they realize that maybe they could have done things differently.

It sickens me to hear of people that make a ton of money and yet are so far in debt that they cannot pay their bills.

There is a better way to do things. When it comes to buying a house try to keep things simple and explore all options. Figuring out how to buy a house debt free is just the first step.

What mistakes have any of you made when buying a house?

What successes have you had?

Please share your house buying tips in the comments.

If you are struggling in your relationship with money, I highly recommend the book Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence

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3 thoughts on “How To Buy A House Debt Free

  1. One nugget of wisdom that has stuck with me over the years is this: You can re-nogotiate your mortgage, ie re-finance, you cannot re-nogotiate the price of your house.
    Rates are low now so this isn’t as big of a deal. When rates rise housing prices will be depressed and that is a good time to buy. You suffer through a high interest rate for a few years, keep your eye on rates and refinance when it makes sense.
    I bought my first house during the era of the Resolution Trust Corp. Rates were in th 8’s but we got our house for a great price.

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