I always wonder why people buy the size/amount of house they don’t need. They look for 5ooo square feet (minimum?), hardwood, chef’s kitchen, marble this and that with several acres (where you can find it) of land etc. house. This is the silliest thing I’ve ever seen. One of the things your favorite southern couple would like you to ponder is to buy the house you need, not the house you want!
If you’re in the market for a home (hopefully your other debt is paid off, like we suggest, and you have a down payment), then you should be aware of what your family truly needs. If there are 3 of you (mom, dad and baby), then a 4 bedroom house IS overkill. If no one in the house cooks (or likes to), then you don’t REALLY need the chef’s kitchen now, do you? You should get just as much house as is required by your families needs, that way, you can save more for the future and have your “comfortable” home paid off sooner.
Struggling with your current home’s mortgage payment? Maybe it’s time you downsized! Many people get into houses that they can’t really afford, and then think there isn’t anything they can do about it, but this isn’t true. If you bought more house than you can afford, chances are, you’re struggling. Now, many people like to blame the banks (and there are some at fault), but they are not the only place to lay blame. It’s easy to find and attack a scapegoat, but in reality, many people who bought more home than they could afford should have known they couldn’t afford them. I know that the interest only loans and the ARM’s made it difficult to understand the EXACT terms of the loan, but let’s be honest…if you were approved for a $200,000 home, and you make $20,000 a year, sirens should have been going off in your head. You should have been confused as to why you could afford so much. You should have paused during your jumps for joy…if you were jumping for joy, saying “WOW, look what I can afford”, that WAS the warning sign!
So, now you have more home than you can afford. Sounds like it’s time to downsize! I know that it can be hard to sell a home in this market, but as long as you keep your price competitive, and keep the home looking great, then you’ve got a good chance. And something else of note? Even if you have to take on a small personal loan to get out of the house, you’re still better off. For example: Let’s say your house is worth $225,000, and you put it on the market for $230,000. Someone offers you $215,000, and they pay closing costs. Well, after looking (really looking) at your finances, you realize you can’t afford more than a $150,000 home. It’s better to sell the house for the offered price, take on a $10,000 personal loan, and find a house for $140,000. You’re going to be better off, even if you did have to “take a hit” on the other house, because you will actually be able to make your mortgage payment now! Sometimes, you just have to look at the bigger picture!
Remember, sometimes saving money IS the obvious choice. Don’t buy more than you should. Sounds simple, so try and live by it!
