GOBankingRates works with many financial advertisers to showcase their products and services to our audiences.
These brands compensate us to advertise their products in ads across our site.
This compensation may impact how and where products appear on this site.
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information.
it’s possible for you to read more about oureditorial guidelinesand our products and servicesreview methodology.
Here are three things he thinks you should knowbefore buying a house.
Once you sign a mortgage, the bankers job is done.
Your ability to pay back the mortgage doesnt affect them, but it will affect you.
In personal finance, your primary goal should be to build wealth, not to buy a home.
That wealth, when you land it, will allow you to purchase property.
Singh recommends a 75-15-10 strategy.
Remember, housing costs are more than just your mortgage.
To afford buying a home, your income must also coverproperty taxes, insurance, repairs and maintenance.
This leaves you with the decision of choosing between an expensive home or income-producinginvestments.
But to this, Singh explains that your home is an expense, not an investment.
Consider this: people dont become rich through paying off their mortgages.
They build their fortunes through investments instocks, businesses and rental properties.
Though he no longer practices, Singh is a licensed real estate agent.
As Sign explained, banks front-load mortgages, which minimizes your earning potential.
The bigger your home and mortgage loan, the more therealtors and bankersare making.
Because of this, its crucial to see your housing payments as an expense instead of an investment.
To build wealth, you must set aside a portion of every paycheck for other investments to earn income.
Once youbuild wealth, youll be able to afford a better home and pay less in overall interest.
Singh says you should account for three things: your monthly payment, the downpayment and move-in costs.
In todays real estate market, looking for alternatives to paying a large down payment may be tempting.
However, a lower down payment comes with risks.
When a bank lends you money, theyre taking a risk.
The other factor you must consider is the move-in costs, which many overlook.
Expenses like hiring movers, closing costs, new furniture and home upgrades can add up quickly.
Singh warns against financing anything with a credit card.
Using a credit card only increases the financial burden in the future and adds additional interest to the mix.
More From GOBankingRates
Share This Article:
