Remember not too long ago when the advice coming out of the air, ground, woodwork and anywhere else was to buy as big a house as you can afford? How well are those advice-takers faring these days? Not too well. How do we know? One only needs to look at the number of foreclosures and loan modifications to know that most people bit off way more than they could chew. It’s not really their fault — those words of ‘wisdom’ were rained down upon the populace like confetti at a parade. It was almost impossible to ignore.
But now we find ourselves in somewhat of an opposite yet similar situation. Interest rates are at record lows and there are deals to be had left and right. Replace the boom of 6-8 years ago with the flat, and you still have people wondering how much house they should afford. The answer is simply this:
As much Hawaii real estate as ONLY YOU can afford.
Yes, there are deals out there and it may be tempting to think the market can only go up and therefore this is your once in a lifetime chance at a goldmine. Is this true? Could be! Nobody really knows, and that’s what matters. The opportunity to buy a house, at any size, doesn’t mean your other obligations go away. You still have to budget for food, education, taxes, leisure, utilities, car expenses and everything else. Your potential mortgage still must fit in the fabric of your overall financial life. If you maintain this holistic, long-term vision, then you may (or may not) miss an opportunity to hit a financial home run, but you’ll also go a long way in avoiding having your home auctioned off at foreclosure at the county courthouse while maintaining a greater peace of mind for you and your family.