1) Get out of debt (except for mortgage debt) as soon as humanly possible; then,
2) Stay out.
|203 Clapboard Ridge Farmhouse with Modern Addition|
1. Put your finances in order before home buying-- which should lead you to know what you can afford.
2. Do the cash flow math. Ramsey thinks your Greenwich home’s monthly mortgage payments should be no more than a quarter of your net income.
3. Get a home loan. Make this a 15-year fixed rate mortgage to minimize total interest paid.
4. Use a good real estate agent- To make sure you are paying at or below fair market value and deal with any “unexpected home buying hurdles.”
Realistically, Greenwich home buying has a bit more involvement than these 4 steps and Step 4 should actually come after Step 2, and Step 3 (getting a mortgage) should come after you have zeroed in on your target Greenwich home.
On a practical note: the 15-year mortgage structure automatically results in a higher monthly payment that, when combined with a 25% of net income budget cap, could yield an unrealistically limited budget target. Being financially conservative also means being realistic. A growing family, for instance, might find that they have wasted money if they have to move to a larger home after only a few years.