… Consider This:
You will now be a homeowner. That means you can paint the walls without having a landlord grouse at you. That also means that if anything breaks, you’re on the hook. Here’s a brief list of areas that can go wrong:
- Animal infestation
- Air conditioning
- Roof leaks
- Hot water heater
…and so on. This is why it’s vitally important to have a plump emergency fund (and appropriate homeowner’s insurance) before you buy your first house. Any one of these things can turn you new home into a nightmare.
I only say this because, just the other week, someone told me about an amazing foreclosure deal near my house. I will admit, for a second, I had the home-buying fever. I recovered quickly, though. Why did I leave such a tempting deal alone? I simply don’t have the wherewithal right now. If I were to buy that house (and I bet I could, given my sterling credit history), I would only put myself in a precarious position. I would be on the hook to a mortgage for 30 years, and if anything went wrong, I would have to go into hock to a credit card to get the problem cleaned up. Frankly, none of that sounds like fun. Sure if everything went according to plan, it would all work out, but things don’t always go according to plan.
I’m not saying this to scare you away from your first home. I’m just saying this to encourage you to think of what could happen that will make your plans go awry, and then to give you time to think about what you can do to prevent this. If you can’t prevent it, then you can mitigate the damage it does to you.