Watching Your Wallet: Advice for first time home buyers
Supply is down and prices are up. It’s a difficult time to buy no matter who you are, but it’s particularly difficult for first time home buyers.
NerdWallet recommends you start off looking for homes that are three times your income. 5.5 times an income means prices that are just out of reach.
Elizabeth Renter is a senior writer and data analyst with NerdWallet. She says, before you start looking at houses, ask yourself how bad you really want it.
“You’re going to have a hard time finding a home that checks all the boxes on your list and especially finding one that happens to do that and fits within your budget,” Renter said. “Buying a house right now is a roller coaster and gut wrenching and people are already living in stressful situations.”
If you are going to move forward then set realistic expectations. Don’t get caught up in ‘winning,’ or you might end up in over your head.
Renter said, “Because you find a house that’s close to all of the things you want. And you’re in competition with other buyers for that home you’re going to be tempted to go over budget and put in offers at the high end of what you can afford.” Be cautious, set your budget before you go into the market, and know your limits.
Another tip? Make your offer attractive. Choose a closing date that works for the seller. Allow the seller additional time to move out after the closing. But never give up your inspection.
Another alternative is that you could just wait this out. Save up for that down payment for another year or two and try again when the market settles.
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