How Much House Can You Afford? – EP 373

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It has increasingly become harder to afford a house than to pay rent. But if you are determined to buy your dream house, this episode is for you! In this episode, Jen and Jill guide you into the complex and ever-changing housing market. Beyond the challenging landscape, they address critical questions, providing valuable insights for prospective homebuyers.

The more you can pay upfront, the less you’ll have to borrow which then means the less interest you’ll have to pay.

Sponsors:

  • Cash back. We all love cash back and one of the sponsors of The Friendletter, Cashifyd, is a perfect fit to tell you about in this episode because they offer cash back at closing when you use one of their partner real estate agents. So if you are buying a home and don’t have an agent check out Cashifyd I usually see between $1,000 and $2,000 cash back and that goes a long way to cut closing costs.

    So check them out at frugalfriendspodcast.com/cashifyd or just click the show notes. And thank you for supporting our sponsors in The Friendletter!

Should I buy a house now, or wait?

This article by Bankrate cites survey results and poses questions for home buyers to ponder when deciding whether to buy a house now or wait for the “right time” in the market.

What Jen + Jill have to say:

“Is now a good time to buy? “: a question Jill often gets asked within her circle. She can feel the weight surrounding the question, seeing how much has shifted in the last 3 years. According to the Fannie Mae Home Purchase Sentiment Index released in November 2023, an overwhelming 85% of consumers believe it’s a bad time to buy a house. But the article also cited that in some parts of the country, it’s getting a little bit better for buyers.

Jen purchased a house in April 2022, and while she was getting rate locks and negotiating, interest rates started skyrocketing. Every home-buying season has its own unique qualities. While the price of your house won’t change over 30 years, rates can change. If you’re still unsure whether you want to buy and can afford a house, ask yourself these three questions from the article: “Do you have excellent credit? “”Have you saved enough for a downpayment? ”, and “Are you planning to stay in the home for a while?

How much house can I afford? (Calculator)

If you answered “yes” to all of the questions, then you can move on to this next article by Bankrate. It shares a Home Affordability Calculator to guide you on what price of home you should look out for.

What Jen + Jill have to say:

Jill runs a test on the calculator with a scenario. For instance, both you and a partner are working and bringing in an annual gross income of $120,000. Your monthly debt is currently $500 per month. $20,000 for the house downpayment, and the current interest rate available to you is 7.3%. The calculator recommends a budget with a home price of $419,813. Now, try it out with different numbers! 

Jen recognizes that houses that cost more are better, but you have to be practical when making a housing decision as it will have the biggest impact on your financial freedom. Buying a house is going to help some people with their monthly expenses—for some, a mortgage payment is going to be less than their rent price (because some rental prices are skyrocketing too). For some people, this is going to be the best financial decision for them.

Describe your dream house! 🙂

Jill is already living in her dream house, but she hopes for a few more improvements. It will also be a dream if it has a pool, a finished garage, and no more increases on their taxes and insurance. Jen dreams of 4 bedrooms, 2 bathrooms, 1 pool, and a finished garage, which is Travis’ dream to have.

Bill of The Week

Thank you Toni for sharing your bill about mindset and VBS to help payoff debt and picking just 1 entertainment subscription

Thanks so Much for Listening!

Thanks so much for listening. We love love love reading your kind reviews and we especially loved this one from:

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Y’all need to tour!

FFP is an entertaining and informative show that just feels like you are chatting with some old pals. I don’t have a lot of friends I can discuss my debt free journey with so it’s so fun to listen to y’all. Y’all have made commutes (and runs) more enjoyable (and efficient). If you’re ever in Houston, you’ve got a friend in me.

Thanks for listening. If you enjoyed this show, please take a minute to leave a rating and review, it helps potential new listeners know what our show is all about!

And don’t forget to share your favorite quote from the episode by using the hashtag #FrugalFriendsNote. 😉

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