Manage the Stress of Buying a Home
Buying a home can be a paralyzing process. If you find yourself passing up one great home after another, you’re probably feeling stressed and a little afraid to commit.
You know that few purchases will provide you the quality of life that a home of your own does. There are plenty of advantages, as well – tax breaks, rising real estate values, a stable environment for the family, to name only a few.
But if you just can’t seem to find the home that’s right for you, something else may be holding you back – fear of financial failure.
Don’t stretch too much. Stretching to buy the most home you can possibly afford is a good strategy, but only if you’ve confidence that your job is stable and you’ll get raises. You may be feeling stress because you have other goals – paying off a student loan, having your first child, making other investments, or furthering your education.
If you’ve been pre-qualified by your lender, your housing costs should be no more than one-third of your gross income. If you don’t think you’ll have enough in reserves should something happen, ask your real estate agent to show you less expensive homes. A home that you can pay for easily will allow you to do the things you want, and as you increase your income and move up in life, you can keep your first home as a rental for income.
Prioritize your financial goals. Whether you’re planning a family, returning to graduate school, paying off a student loan, or buying a new car, your financial pie can only be sliced so many ways. Your mortgage is the largest piece; the larger it is, the smaller the other pieces. Set reasonable financial goals for paying off or adding new debt, and your mortgage won’t loom so large. Setting a budget may sound old-fashioned, but it’s the best way to multi-task the income you have.
Tame your fears. Without a crystal ball, you can’t predict the future. But you should be prepared by setting aside savings every month and contributing to a 401K or IRA. Keep low balances on your credit cards so you’ll have a cushion when you need it.
Look at the worst case scenarios compared to the best-case scenarios. Examine the questions that are really bothering you, like “what if we can’t make our payments?” or “what happens if our home loses value?”
Ask yourself instead, “what if we manage our money so well that we can pay more toward our house payments?” or “what if our home goes up in value?”
Property can go up or down in value, but it’s more likely to stay up with proper maintenance. Rest assured that there will always be a buyer for an attractive, well-maintained property.
Buying a home really comes down to how confident you are about managing your money. If you’re worried about cash flow, accelerate your credit card pay-offs now and don’t incur new debt. Budget your monthly expenses to pay off the costliest debts first. Don’t be dazzled by any home that is beyond your means. Be willing to compromise. Shop in your price range with affordability in mind, and you’ll find your dream home will appear right before your very eyes.