Let’s Get Real: Can You Actually Afford That House?

December 19, 2013
by Michelle Perry Higgins

Start Shopping for Long-Term-Care Insurance at 45What’s one thing people should keep in mind when re-entering the housing market for the first time since the crash?

I urge my clients to look at home purchase from a financial-planning perspective and ask themselves if they can realistically afford the home they want. This should be the primary consideration when weighing the pros and cons of making a real-estate purchase.

Meet with your financial adviser to review the numbers. Ask yourself: How will this investment affect my financial plan and the other savings goals I have in place? If I lost my job, how many months of emergency reserves do I have set aside to pay my mortgage? The numbers need to work successfully in your financial plan. If they don’t, you might want to reconsider getting back into the housing market.