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Am I getting in too deep by buying my first home?

Updated: Jun 3, 2019

When you are deciding whether you can afford to buy a home rather than remaining a renter, there are more factors to consider than the monthly payment. The purpose of this article is to discuss the other factors so that you can determine if owning a home is a good idea for you.

First, a lifestyle assessment will help.

Lifestyle Assessment

  1. How often do you like to eat out? Would you be willing to eat at home more often if it helped you afford more house?

  2. Are you conservative or “passionate” in your spending? Are you willing to become more conservative?

  3. Do you buy a lot of clothes, jewelry or accessories?

  4. Do you want a new car every few years?

  5. Do you have expensive hobbies?

  6. Are you likely to have a manic moment and buy a luxury item (i.e. boat, Jet Ski, additional vehicles)?

  7. Do you have children?

  8. Are they in private school, college, or will they be attending college soon?

  9. Do they have any special needs that require unusual cash outlays?

  10. Do you like to gamble? Do you control yourself and stick to pre-set spending limits, or do you have a history of getting carried away while gambling?

  11. If you are buying a home, please try to estimate how much work you will want to put into it when you move in, and how much furniture you are going to want to buy. This factor is the most overlooked of all, and the point I drive home to my clients, if I have any concern at all that they are stretching their budget too thinly (especially first-time home buyers).

Becoming aware of our spending tendencies is the first step. The next is to determine how much we are willing to change in order to be able to afford the mortgage payment for the home we want, and if changing our habits is even necessary. Life is about balancing what we want and the price we must pay to achieve that, (financially or otherwise).

Income Flexibility

Income flexibility is an area that lenders have no way to honestly assess. But you know yourself and can include this factor when you are determining the mortgage payment that allows you to sleep comfortably at night.

Many of us work as hard as we need to work in order to achieve what we really want in life. It is easy to get stuck in our current mindset and believe that the money we are earning now is all that we can reasonably expect to make. However, in my experience, most of us can do more than we are doing now if we are properly motivated. Would the promise of a home you really love cause you to kick into a higher gear and earn more?

One of the reasons I chose to keep my home even after my children grew up and moved out is that I wanted to motivate myself to be the best I can possibly be. The payment and maintenance of my home is challenging; and affording it keeps me on my toes. I never want to allow myself to get lazy.

I think for all of us there is a zone somewhere between laziness and overwork that is a wonderful sweet spot. It is a place that is challenging enough to cause us to grow, without being so challenging that we get overwhelmed and fail. I try to stay in that zone. My hope is that you will also.

Next, it is important to consider that you will be responsible for 100% of the repairs and upgrades. You won’t have a landlord to call when something breaks. Are you prepared for those expenses and the responsibility?

Backup Plans

One reason very few of my clients lost their homes in the crisis that began in 2007 is that I always helped them understand the importance of having backup plans. If something goes wrong, are you prepared to weather the storm?

The best backup plan is savings. Don’t rely on credit cards or a HELOC (Home Equity Line of Credit) to help you in a storm, because you don’t have control over those. The bank can shut you down at any time without warning. In 2008, most banks shut down lines of credit.

You may have other backup plans. The point is to think about what you will do to keep your home if anything goes wrong with your employment or income.

I hope this article helped you. If you have any questions, contact me at

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