The book “The Millionaire Next Door”, written by Dr. Thomas Stanley, stands out because it is a classic in the personal finance world. One of the key principals in the book centers on living below your means (regardless of income level, profession or status). Specifically the author talks about how most millionaires live in modest homes in solid neighborhoods. Using this principle, it is important for a young couple to purchase the most suitable home in order to start their financial life on the right foot.
Often, very competitive couples strive to purchase a home in an area with a reputation for great schools. There is nothing inherently wrong with looking for a home in a community with good schools. There is usually a premium to get into the neighborhood. Add to that the right car and the right accessories for the neighborhood. You can continue to add to this list, e.g. highly fertilized grass and slate patios. Not long or the couple is living way beyond their means!
Before you start looking for a home, ask the lender to pre approve you. With your pre approved letter you can show sellers that you are serious about buying. Take your time and calculate in order to make 100% sure you can afford the payment. Or else you can find a cheaper home. Take into account your living expenses e.g. utility bill, groceries, daycare, transport etc. and all your debts that need to get paid on a monthly basis.
So, how do you figure out how to buy the home that is suitable for you so that you can live your dream? Let your Real Estate Agent assist and guide you. A good real estate agent should have the knowledge, expertise and should be in the best situation to guide you into buying the best home that suits you.
