Tuesday, June 26, 2018 / by Bret Johnson
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Unfortunately, this process can sometimes lead people to purchasing a property they can’t afford. And while banking requirements have tightened over the last decade, homebuyers can still easily find themselves biting off more than they can chew.
Today I’d like to highlight five signs that you’re about to buy a home you can’t afford.
1. You’re using creative mortgage terms. If your financing looks like a trail mix of mortgages, this is probably a significant indicator that you can’t afford what you’re about to buy. If the financing feels forced, you are likely taking on more than you can handle.
2. You need a down payment assistance program. If you need help with your down payment, you might be buying a home before you’re ready to own it.
3. You have just enough to cover your mortgage payments. This means you’re at your maximum affordability limit. You don’t want to end up “house poor” and not have enough money after your house payments to live the rest of your life.
4. You’re borrowing from a retirement account. A retirement account is set up for just that—retirement. You don’t want to dip into that account and overextend yourself financially.
5. You have a sinking feeling about the purchase. At the end of the day, if you don’t feel right about the home you want to buy, maybe it’s not the right home for you.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.