• About
  • Mortgage Basics
  • $40K Challenge
  • Aunt Doris
  • Grandfather Says
  • Privacy
  • Archives

Len Penzo dot Com

The offbeat personal finance blog for responsible people.

Can You Afford a Home?

By Enero Febrero

Purchasing a home is one of the bigger moments in many people’s lives, whether or not they have purchased on in the past. But with rising home prices and interest rates, it can seem less and less affordable to acquire your own home. There are a few things to consider that can help make owning a new house as affordable as possible:

Think About Your Funding Options

There are sources of funds you could tap to make a home affordable. One option might be to sell your life insurance policy through a life settlement. You have a few options if you are considering going this route, such as a viatical settlement. These can also be ideal for terminally ill patients who need cash right away. Still, the transactions can be complicated, so you can go over a guide on viatical settlement taxation to determine if this is the right option for you.

Consider an Older Home

Another thing to do before applying for a mortgage is think about how much time you have and are willing to dedicate to the upkeep of a home’s needs instead of paying to outsource these tasks. If you don’t mind doing home repairs yourself, you might be able to get a slightly older home in need of some repairs. These houses tend to be priced a little lower than others in the same area. Depending on the age of the house and extent of the necessary repairs, you could qualify for a special type of loan that will take the costs of repairs into account. This can make the repairs a bit more affordable. As you make improvements, you will be building equity, which will allow the value to go up.

Choose a Different Location

Many homebuyers, especially those with kids, want to get something in the right neighborhood. You might want a neighborhood with other families, or you may want to be closer to the school district. However, these more desirable locations can be more expensive than you are able to afford. There are school programs that let you reside outside the district. That allows you to live in an affordable area while still having access to good schools.

Get an Early Inheritance

If your family is willing to help you obtain your home, you might be able to ask for an early inheritance. You will likely need to have the funds in the account for a couple of months, and the giver might need to write a letter that this is a gift and not a loan. Still, if you meet the requirements, you may be able to use the funds for the down payment. Or you could put the funds toward other debt you might have, allowing you to lower your debt-to-income ratio. If you have not received any offers of gifts, think about any relatives who you know you will receive an inheritance from. Then ask if they are willing to give you some of the funds early so you can make your down payment. Your family knows they will be helping you make an investment, and depending on the circumstances, they might even include themselves in the investment strategy.

Photo Credit: stock photo

June 16, 2022

Comments

  1. 1

    Ronald says

    Ask me after the crash. Until prices fall about 50% from where they are now, no.

  2. 2

    Karen Kinnane says

    You can also decide if your home is to be a drain on your finances or a partial income stream. A house can help pay for itself in different ways: 1. Rent the garage for dead storage to a classic car collector. 2. Plant a garden and harvest fresh fruit and vegetables. 3. If the lot is fenced you can earn good money renting the yard out by the hour for people who want to exercise their dogs safely. 4. Rent a spare room. This can be very easy and lucrative if you have a bedroom and private bath on the first floor. Replace one window with a French door and you have a private room to rent out long term or Air B and B. 5. If things get really tight and you are alone you can rent the whole house and you live in the first floor bedroom. 6. Rent part of your driveway for parking. 7. Pet sit in your own home, many people don’t want to put Fido in a kennel, they want a family setting.

    • 3

      Len Penzo says

      Fantastic! Thanks for the additional tips, Karen!

The Question of the Week:

Will you be taking a summer road trip of 500 miles or more this year?

View Results

Loading ... Loading ...

Recent Posts

  • Shadow Inventory and Mortgage Rate Impacts on the Housing Market
  • The 4 Worst Ways to Pay Down Debt
  • The Ethics of Found Money: Should You Keep It?
  • Black Coffee: The Sky’s the Limit
  • The Difference Between Real Wealth and Paper Wealth
  • Savings Tips for High School Grads: 6 Ways to Kick-Start Your Savings
  • Shopping In the Modern Age: Does the Internet Encourage Overspending?
  • 9 Ways to Ensure Your Road Trip Sucks
  • Black Coffee: Tick Tock Goes the Debt Clock
  • Grandfather Says: The Continuing Chronicles of Elaine, Part 15

Disclaimer

This site is for informational and entertainment purposes only, and the content herein should not be mistaken for professional financial advice. In fact, making investment decisions based on information published here, or any other website for that matter, is more than unwise; it is folly. This website accepts advertising in the form of monetary and other compensation; as such, topics of discussion are occasionally influenced by these advertisers. Sometimes, an article may also include affiliate links, meaning, at no additional cost to you, this blog earns a commission if you click through and make a purchase (for example, as an Amazon Associate I earn from qualifying purchases). Remember, you and you alone are responsible for the decisions you make in life, so please contact an independent financial professional for advice regarding your unique personal situation.

Sign up for the weekly Len Penzo dot Com newsletter
Len Penzo dot Com Delivered Weekly
Join more than 40,000 readers and fans who enjoy personal finance and macroeconomics with an offbeat twist!
Invalid email address
Thanks for subscribing!

Popular Now:

  1. 1. How to Fix Your Finances Without More Money
  2. 2. The Ethics of Found Money: Should You Keep It?
  3. 3. 34 Financial Tricks to Help You Retire Early
  4. 4. Why Coffee Drinkers Waste More Than Money at Starbucks
  5. 5. How Smart Couples Save Money by Gaming the System
  6. 6. Effective Negotiating Tactics Everyone Should Know
  7. 7. Credit or Debit: Which One Is Actually Better?
  8. 8. Why Paying Off the Mortgage Early May Be a Big Mistake
  9. 9. Historical Gold & Silver Benchmarks for Wages and Commodities
  10. 10. 4 Good Reasons Why Some Quarters Are Painted Red

All-Time Most Popular:

  1. 1. 19 Things Your Millionaire Neighbor Won’t Tell You
  2. 2. Dear Friend: Here Are 41 Reasons Why I’m NOT Lending the Money
  3. 3. Why Your Expensive Luxury Car Doesn’t Impress Smart People
  4. 4. If You Can’t Live on $40,000 Annually It’s Your Own Fault
  5. 5. 21 Reasons Why Corner Lots Are for Suckers
  6. 6. 4 Smart Reasons Why College Isn’t for Everyone
  7. 7. 18 Fast Facts About Social Security Numbers
  8. 8. My Ketchup Taste Test: Upset! Guess Which Brand Topped Heinz
  9. 9. Why I Prefer a Spreadsheet to Track Expenses and Manage My Finances
  10. 10. Here’s a Simple Trick for Getting Credit Card Interest Charges Waived

Copyright © 2023 Len Penzo dot Com · All Rights Reserved · Designed by Nuts and Bolts Media

© Len Penzo dot Com 2008–2023

x
x