People who are in this condition are short of cash for non-essential items, like entertainment and recreation. They are prone to having trouble meeting other financial needs. In this article, we have been able to compile all you need to know about house poor, house poor meaning, cash-rich house poor, and buying a house poor credit.<\/p>\n
House poor is a terminology used in describing people who spend a huge amount of their overall income on payment of a mortgage, home purchase, payment of property taxes, and maintenance of properties. <\/p>\n
Sometimes, House poor can be said to be cash poor, house rich.<\/p>\n
House poor arises first from increasing an already tight budget to purchase a house. It starts by spending so much on a house which can sometimes lead you into this situation known as house poor. <\/p>\n
If you want to avoid being house poor especially if it\u2019s your first time purchasing a home, financial advisors highly recommend that homeowners shouldn\u2019t spend more than 30% of their net income on a housing purchase.<\/p>\n
Furthermore, do not take the risk of putting yourself in a tight corner where you tend to become house poor. Carefully find a place with a reasonable range of housing costs that your budget can comfortably handle.<\/p>\n
For cases where you desperately need to own your dream home, You may need to consider looking for ways to increase your income. <\/p>\n
You may need to pick up a side gig where you can be making extra cash.<\/p>\n
Already house poor and looking for a way out and a permanent solution, you may likely need to consider selling off your present home and purchasing a less expensive one. Regardless of the stress that comes with it, it may be the best solution at this point.<\/p>\n
What exactly is house poor meaning and how can an intending homeowner avoid it?<\/p>\n
For the House poor meaning, it is spending a huge percentage of your monthly income on a house, making it very difficult for you to achieve your other goals (financial or personal). <\/p>\n
Being house poor is possible regardless of your net income as long as you\u2019re spending so much on the property.<\/p>\n
As a result, you tend to channel almost all if not all of your income to the mortgage thereby making you house poor.<\/p>\n
For the average U.S, owning your own home is an American\u2019s Dream.<\/p>\n
Over time, it has become a nightmare to many people because of this cash-rich, house-poor situation.<\/p>\n
For instance, Buffett has lived in a particularly comfortable house for most of his youthful life. The house was purchased in 1958 for approximately $31,500. He referred to it as his third-best investment. <\/p>\n
The said house was worth $31,500 in 1958, in today\u2019s dollar estimation, it will be approximately $250,000.<\/p>\n
In his words, he decided to go for a house he could afford at the time not because of any investment that will appreciate with time.<\/p>\n
His focus was on the idea of a home for living instead of a castle building. <\/p>\n
When you misplace the two, things can go wrong.<\/p>\n
Moreover, wealth is not attained by just investing, but wealth is attained by avoiding irrelevant expenses.<\/p>\n
This little wisdom was what helped Warren Buffett to grow his wealth over the years.<\/p>\n
Wondering if you are under the category of house poor? <\/p>\n
#1. Do you constantly worry about your ability to fund your monthly mortgage payment?<\/p>\n
The moment you begin to dip hands in your savings to fund the monthly payment, at that point, you should know you are house poor.<\/p>\n
#2. When you don\u2019t have funds set apart for emergencies probably because you don\u2019t have enough money left after paying for the monthly mortgage<\/a>.<\/p>\n #3. When you obviously don\u2019t have any space in the budget to come up with a retirement fund<\/p>\n #4. When there are other needs staring at you in the face but you feel so helpless. Probably because the cost of the house ownership holds you back from meeting those needs. Situations when you have to cancel out recreation or enjoyment plans, travel plans, etc is a house poor situation.<\/p>\n #5. When you spend a huge part of your income on paying for your housing. <\/p>\n Going on, we will take you through the easy steps you should take when you are buying a house with bad credit. This is to enable you gift yourself the best.<\/p>\n There are important questions you need to answer before buying a home with bad credit. They include;<\/p>\n #1. How bad is your credit?<\/p>\n #2. What is your source of income and how steady is it?<\/p>\n #3. Do you have any outstanding debts?<\/p>\n #4. Are lenders in the area ready to work with you? <\/p>\n The first step, certainly, is to discover the credit score you are working with and know where exactly you are to start from.<\/p>\nBuying a house poor credit<\/span><\/h2>\n
Here are steps to buying a house poor credit<\/span><\/h2>\n
#1. Know your credit report<\/span><\/h3>\n