With interest rates being at an all-time low, I can understand the urgency for people wanting to purchase a home. But I caution the first-time home buyer to learn how to budget their money before buying a new home.
I happen to live in a state with one of the highest foreclosure rates in the country. I was so shock to learn that many people loose their homes within the first couple of years. I wondered why so soon. Sure the economy is not the best and people are getting laid-off and having hardships, but some people are simply not prepared for the unforeseen problems and expenses that comes with owning their first home.
When I received a call from a friend telling me about a property less than a mile from my home that was in the process of being foreclosed on, I quickly made arrangements with their agent to view the property. It was a nice single family residence with some minor wear and tear. The family that was loosing the home was a basic middle-class family. I had less than three weeks to close the deal since the home was to be sold on the courthouse steps the following month.
Needless to say I bought the home and had instant equity in the property. Before the closing, I sat down with the previous owners and asked why they were loosing their home. The wife said to me in a matter of fact way, “Well we started falling behind on some bills, and soon things got out of control.” I wanted to ask her if she had a budget, did they keep track of their monthly expense but I didn’t want to impose on their privacy. However, I explained to her that I was a Financial Coach and worked specifically with people to help them customize a budget. She promised to get in touch with me after the transaction but I never heard from her again. I often wonder if things would’ve worked out differently seeing as if they had utilized a budget before and after buying their home.
http://ezinearticles.com/?Budgeting-Before-Buying&id=64669
