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Am I House-Poor?

upside down mortgage in Orlando, Florida

What does it mean to be house poor? After the huge recession of 2008 that came from an out of control housing market bubble bursting, more Americans became familiar with a whole host of phenomena associated with carrying large, six-figure debts to mortgage companies. One such phenomenon is the state of being “house poor”. House poor individuals and families owe a massive portion of their income to making home or home-related payments. This can be everything from the mortgage to property taxes. Therefore, it is very important for home shoppers to create a monthly budget for what their lives will be like when they are finally in their new home. You don’t just factor in the cost of your mortgage, but all taxes, utilities, and maintenance costs. When those costs are too large, it leaves the homeowner with little cash to spend elsewhere. That lack of available cash means that unforeseen events that cost money will through the family budget into chaos and cause missed payments on other things like cars and credit cards.

Many personal finance experts say that your housing costs should be no more than a quarter of your income. If your other monthly expenses are very low, then it can be ok to let your housing costs rise to 30%. Today this is pretty much impossible for millions of Americans. With stagnant wages and the expectation that a home is not just a place to live but an investment that appreciates in value, it stands to reason that the cost of buying a home is outstripping most people’s ability to comfortably afford one. It is much more common for rent to be equal to half of income.

It is possible for you to make a great budget and still fall behind. Life circumstances can change, or an expensive problem with the home can become discovered later. In today’s economy, it is always possible for a worker to lose their job unexpectantly. Another cause for being house poor is having an adjustable rate mortgage. Sub-prime mortgages can be a good tool for some home buyers, such as those looking to sell quickly. The problem is that before 2008, subprime loans were being given out en masse to homeowners who would have been much better served by a traditional, fixed rate loan. Once that interest rate adjusted, many families’ budgets were broken.

Speaking of budgets, can you handle all the expenses that go along with homeownership? It is advisable that everyone owning their own property have a savings account that you contribute to on a monthly basis so that major fixes like plumbing and electrical can be taken care of immediately since those are usually the most important things that make a home livable. If you can’t afford to pay your bills and save every month, you might be house poor.

Cutting costs may be all that is needed to get your budget back on track. Before downsizing homes, downsizing to a less expensive car payment may be just what is needed. Today, there are many options you can choose from to earn some extra income as well. The gig economy means that you can make a second job fit into your schedule. Maybe you can do some driving for a ride sharing app a few hours a week to help with your home budget.

A home loan refinance may help if your problem stems from an adjustable rate mortgage. You may increase the duration of your pay period, and ultimately pay more for the home, but the monthly payments can be brought back down to a more manageable level.

If none of these steps helps, it could mean that you are simply too house poor to save the current situation. In that event, selling your home may be the best option. You certainly can try selling the home on your own or by having a real estate agent do that for you. There are benefits and drawbacks to doing this. You can maximize the selling price but you also will spend lots of time and have to work pretty hard at it. If you are busy or stressed out, this can be a lot.

Another option is to contact Sell My House Fast Orlando. Florida home owners have a great resource at their disposal. With this company, you can close the deal on your own schedule and you never have to do any showings of the home to the public. All that is needed is a visit by the representative to evaluate the home and make you an offer. You can always reject the offer at any time. You can visit their website or call (321) 332-1888 today! Relief from being house-poor really is just a phone call away.

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