In a hot housing market, you may have to compromise on your wish list to secure a home. According to Victoria Cornell, you don’t have to find your forever home right off the bat. “Purchasing your first home is exciting and is a big life goal for so many.”
She goes on to say that in a strong seller’s market, “it’s okay to focus on getting your foot in the door and not purchase your dream house. You can always renovate, build an addition, or move again later."
It can be tempting to stretch your budget in an attempt to score your dream home. However, allocating a disproportionate amount of your total income to homeownership is known as being “house poor” and can negatively affect the rest of your budget.
Jeff Cooper, a personal finance blogger, cautions first-time home buyers not to take what the mortgage lender tells you at face value. “Often, (the) first time home buyer see the amount the banks tell them they can afford and assume it makes sense."