By Kevin Janiec, CFP®
Homebuyer’s wishlists are getting bigger. At least the ones that I know. And I get it.
We need more space to accommodate our growing families and home offices. We value good schools and vibrant communities. We fill up Pinterest Boards with visions of updated kitchens and bathrooms.
Meanwhile, buying a home is getting tougher.
Demand is exceeding supply. Rising interest rates are significantly changing that monthly payment. Inflated building costs makes “new construction” and “fixer uppers” less affordable. Inflation on everything else makes our budget even tighter to begin with.
This is putting homebuyers in a bit of a conundrum as they approach one of the most impactful life choices and commitments they will ever make. So before making that decision in a state of desperation or frustration, here are a few proactive measures the homebuyers can take:
- Clarify your priorities and deal breakers – Know which things on the wish list are most important, which things you’d be willing to forego, and which things would immediately rule out a potential house. Make sure your partner knows these things. Make sure your realtor knows these things.
- Understand the impact this purchase makes on your other financial goals – When establishing your home budget, don’t forget to factor in the closing costs, the likelihood of offering “over asking,” and the added expenses to furnish and maintain your home. When you pre-qualify for a mortgage, the lender might not care about whether you have plans to eventually retire, send your kids to college, or have a social life. We do. After this home purchase, how will all of that important stuff change?
- Create flexibility in your timeline if possible – Rushing this decision or buying at all costs can pose some regrettable risks. With time on your side, you can afford to be a little more flexible, selective, and confident when the right house comes along. This might require renting to buy yourself some extra time, but that’s a tradeoff we would make for the right long-term decision.
Where does the New Wealth Project come in:
We help our clients have better money conversations to stay more aligned and confident through big decisions like buying a home, so they can look out their new kitchen window without regrets.
Looking for guidance on a big upcoming decision?
Let’s talk about it! Schedule a free Personal Mission Builder consultation today.
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Investment Advice offered through FC Advisory, LLC, a registered investment adviser doing business as Financial Coach and also doing business as New Wealth Project.