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Can’t Afford to Buy a House Where You Live? Here Are Dave Ramsey’s Tips to Survive a Competitive Housing Market – The Motley Fool

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It can be frustrating not to afford a house, but Dave Ramsey’s…….

Image source: Getty Images

It can be frustrating not to afford a house, but Dave Ramsey’s advice may help.


Key points

  • Buying a house you can’t afford is a huge financial mistake.
  • For many people, the housing market where they live is too expensive.
  • Dave Ramsey’s advice is to take the time to save more money and reconsider the type of house you want and even the location you’re searching in.

When you are interested in buying a house, it’s important to make sure you don’t move forward until you are certain you can afford it. Home ownership comes with many expenses beyond just your mortgage payment, and you will be making a long-term commitment to cover these costs every month. If you stretch yourself too thin, this can lead to a lot of stress and make accomplishing any other money goals impossible.

Unfortunately, as home prices have risen in recent years, many people have found themselves trapped in competitive housing markets. If this has happened to you, it’s very possible you may feel like you cannot afford to buy any houses where you live. This can be frustrating, but finance expert Dave Ramsey has three important suggestions for how to deal with this difficult situation.

1. Wait to buy and save more money

Ramsey’s first suggestion is to simply wait longer to purchase a home and save more money in order to make sure you don’t take on too large of a mortgage.

“If you want to buy a home in an expensive market, waiting may be your smartest move,” Ramsey said. “In the meantime, keep saving. Your area may seem more affordable three years from now when you have a hefty down payment saved!”

This advice makes some sense since if you can wait and save more money, you can borrow less — and the smaller your mortgage loan, the cheaper your monthly payment. Ramsey is also right that it is possible housing prices will fall over the coming years, so you could potentially get a better deal by waiting.

Of course, the flip side is that homes could keep going up in value where you live and mortgage rates could keep rising so you could end up saving for years only to find that properties have become even more expensive and are still out of reach for you. It’s impossible to predict if this will happen or not, but you need …….

Source: https://www.fool.com/the-ascent/mortgages/articles/cant-afford-to-buy-a-house-where-you-live-here-are-dave-ramseys-tips-to-survive-a-competitive-housing-market/

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