| First, let me tell you that mortgage debt is the only kind | | | | your take-home pay and you should get a 15-year or |
| of debt I don't yell about. I don't borrow money - ever. | | | | less fixed-rate mortgage. Notice I said a 15-year |
| But, I know most people won't do the "100% Down | | | | mortgage, not 30. Don't be tempted by the smaller |
| Plan" when it comes to buying a home. So what are | | | | monthly payments of a 30-year mortgage. The truth is |
| your options? | | | | 30-year mortgages are for people who enjoy being in |
| For those of you who are in debt (which is most of | | | | debt so much they want to extend it for 15 more |
| you), let me tell you what Sharon and I did. Nearly 20 | | | | years and pay thousands of dollars more in interest |
| years ago my wife, Sharon, and I hit the financial | | | | for the privilege! |
| bottom because of our debt. We did an unpopular | | | | Now, you can probably qualify for a much larger loan |
| thing to help turn things around. After years of | | | | than what 25% of your take-home pay would give |
| marriage and owning hundreds of pieces of real | | | | you. But it's really not wise to spend more on a house |
| estate, we became renters. Normal mindset is that you | | | | because then you will be what I call "house poor." Too |
| should buy and not rent but remember normal is broke. | | | | much of your income would be going out in payments, |
| All these years later, I can see that that was probably | | | | and it will put a strain on the rest of your budget so |
| THE best sacrifice we made. We were able to pay | | | | you wouldn't be saving and paying cash for furniture, |
| off our debts and save money for a house. | | | | cars and education. |
| Although that's the smartest and safest route, if your | | | | The point is your house payments shouldn't take over |
| heart is set on buying a home you can still do it wisely. | | | | your budget. Don't let your mortgage payments cause |
| But if you can't pay cash for a house in full, how do | | | | you major stress every month for years and years to |
| you figure how much house is too much? | | | | come. Your dream home needs to be just that, a |
| Take some time to sit down and do the math. Your | | | | dream. You don't want it turning into a financial |
| mortgage payment should not be more than 25% of | | | | nightmare. |