Friday, December 2, 2011

How to Buy Your Castle - Choosing Your Lifestyle

You do not have to be a king to live in a castle.

Many individuals have placed a lot of their focus on their home. Too much so, actually. Their "Dream Home"
has taken over their lives and become an obsession. There are many individuals that are what I call "Mortgage Poor". This meaning that they are living merely to support their chosen lifestyle. Their castle as it were.

What happens to these individuals when there is a drop in real estate values ? What happens to them when there is an increase in interest rates ?  You guessed it. Foreclosure ! A harsh reality for many Americans today.

Wherever you may live, it could happen to you as well. No one is safe from a falling Real Estate market and/or rising interest rates. Individually, we have absolutely no control over the markets. We are at their mercy unless we plan.

All markets go up and all markets go down. Cycles. Nothing goes up forever. Nothing goes down forever.
Real Estate is not immune to the above, it merely has longer cycles. Remember this, as most don't.

As in all markets, be careful not to buy at the top. Do not rely 100% on your Real Estate agent or your banker for advise when and where to buy. Remember, they earn their living by selling you something and they earn nothing if you don't buy now. Use their advise, yes, but don't rely on them exclusively. Do your own research about the markets and the areas that you wish to live. Take control of your decision.

Your purchase must also be something you can comfortably afford today. Do not buy if you are stretched financially today. Always leave yourself room for a future market downturn or a rise in future interest rates. They are coming, it's just we don't know when. Be prepared.

Owning your home is still one of the best investments one can make. However, be careful not to get caught up in the drama of the up, up up, crowd. Buy your home sensibly and stick to what you can easily afford today.You can always upgrade later if it looks right.

Always buy your home. Don't let someone sell it to you. Stay within your comfort zone and don't let someone push the envelope. You are the one that has to make the future payments, not them.

Whatever home you buy, it will be your castle. Do not become a slave in the dungeon. Be the king or the at the top.

As always, I welcome your comments and suggestions for future topics.

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