Buying a House? Better have more than a Down Payment

Posted By : admin
Category : Budgeting
09 - Sep - 2014

Buying a house is one of the most stressful things in life.  You have to worry about your credit score, inspections, moving costs, and coming up with a down payment.  In my experience, people think about these things prior to purchasing a home.  However, there are also other costs/expenses involved with the purchase of a house that I don’t believe most people take into consideration.  Through this blog I don’t want to talk anyone out of their dream of owning a home, but I do want to point out that the purchase of a house is really, seriously expensive.

Assuming you are buying a house larger than the one you had before, you probably don’t have enough stuff to fill your new house.  I am talking about decor and furniture.  Furniture is really expensive.  Make sure that if you are moving into a bigger space that you have budgeted for the additional furnishings you will need.  One of the worst things to finance, in my opinion, is furniture.  You really don’t need to be paying interest or have the stress of an additional payment for furniture.  It would be better to slowly add furniture over time or use garage sales or craigslist to furnish while paying cash.  AND, if your old house had a bunch of empty rooms as well now might be a good time to reevaluate whether you actually need to move.

Another point that those blinded by the thought of homeownership often miss is that maintaining a home is expensive.  I know you just got an inspection that says the entire house is perfect, but that inspection isn’t worth the paper it’s written on after closing.  From the moment you purchase a home it is only a matter of time until the furnace or air conditioning breaks, until you have a pipe that leaks, until your garage door needs to be replaced, etc.  What about landscaping, paint, changing out the flooring in a room or two.  It all adds up and it adds up fast.  The point is that no matter whether you purchased a “money pit” as pictured above, from the moment you own your home you will have continuing maintenance expenses.  And you better have an emergency fund left after making your down payment in order to cover these expenses equal to at least 6-months of living expenses in your new house.

If you spend your last dollar on the down payment and the moving truck you have set yourself up for financial failure for years to come.  You will perpetually be stressed out about whether something in your home is going to break down and how you will afford to fix it.  You will have no choice but to fall back on credit.  You will wish you had never purchased the home.  So, do your future self a favor and don’t buy a house unless you really can afford it.  Making the wrong decision to buy a house you can’t truly afford will impact your financial future and possibly even your retirement.  Have the financial discipline to avoid this trap.

Halcomb Singler, LLP, is a debt relief agency.  It helps people file for bankruptcy under the bankruptcy code.  No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so.  The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.