subject: Buying a home out of fear [print this page] Buying a home out of fear Buying a home out of fear
It is a normal occurrence for local real estate markets to sometimes undergo rapidly rising prices. When this happens, many potential homebuyers feel a sense of panic because they are afraid that prices will continue to rise until homes are no longer affordable. Unfortunately, this fear can be encouraged by those in the real estate industry who have their own motives in encouraging people to buy immediately (namely their commission fees).
You should understand, however, that to this day real estate prices have not risen so high as to make the dream of owning a home unaffordable for most people. The markets go up and down over time, and you shouldn't feel a sense of panic that you lost your opportunity to purchase a home.
As a matter of fact, there are times when homes are clearly overpriced (as was the case in the late 2000s), and potential homebuyers could benefit from simply waiting for the bubble to burst and prices to fall dramatically. Of course, there is a possibility that if you do postpone your purchase for a number of years you will end up having to pay more for any particular house you set your heart on. That is certainly possible, but we are simply trying to convey that you are unlikely to be locked out of the real estate market permanently.
How much can you really afford?
Anytime you have to make a big decision in your life, you will most likely feel a certain amount of uncertainty and fear if you haven't done your homework. The truth is that not evaluating your financial status is simply asking for trouble, and this is no way to go about purchasing your first home (or your second home, for that matter). Making sure your financial affairs are in their proper order should be your first priority before purchasing a home.
This will, of course, help allay many of your fears and reduce the stress level associated with big decisions like taking on a new mortgage. That is important, since we are talking about dealing with fear regarding home purchases. But this isn't just a psychological benefit we're talking about either. It is essential for you to examine your finances closely and understand how much you can really afford (and not just what your bank is willing to lend you).
