House Poor
A Reality Check
The expression house poor refers to when you buy a house barely in your budget and are left with very few funds to cover your other expenses.
This is very dangerous and if your family income is cut due to some unforeseen circumstance like loss of job or pregnancy, you can end up having trouble maintaining financially stable.
The mortgage crisis we face today is a direct reflection of peoples greed but, the truth is the lenders are only half of the problem. People continually buy houses that they can barely afford with little to no assets in place. Do not become emotionally attached to any property until you fully understand the costs presented.
Keep in mind on average an American family moves once every five years. This is probably much higher in our region. It is also very unlikely you will keep the same job for your entire mortgage period.
It is important you do not confuse a single family house, that you plan to live in, with an asset. Even though you can use it as security for a loan it does not increase your cash flow until you decide to sell or rent the property. If you posses no assets then you are planing to pay for your property strictly out of your earned income.
Here is a mortgage calculator to help you determine where you stand and avoid becoming “house poor”.
Leave the House Poor Page
and Go to The Debt Help Homepage
|
