Dual income home buyers
Sam Schneiderman, Broker-owner of Greater Boston Home Team talks about how he approaches the two income family when they come to him to discuss buying a house.
Boston real estate is pricey. So pricey that it often takes two full incomes for many buyers to get into their first home, but that might be risky later for some couples. Anyone that’s been reading my posts for a while knows that I am all about planning ahead to avoid surprises later.Most couples come to me with some part of a home buying plan. They might want to be near work, relatives or a particular house of worship. Maybe they have a lifestyle in mind and need to find the best community that will meet their lifestyle expectations as well as their current budget and future financial situation.
I go through a list of questions when I interview with couples that want to buy. Usually, our conversation opens the door for more discussion between them later, so that they can get a plan together before looking at homes.
Before I start to show homes to my buyer-clients, I want to make sure they have a home buying plan that I understand, because when the excitement over a home kicks in, someone has to have their head screwed on straight to make sure that it’s not just love at first site. As a result, most of my buyers stay in their homes for a long time.
Unless they’ve already let me know in some way, a couple of the questions that I ask are: What are your future expectations for your current job, career and income? Will you both continue to work when a child arrives?Kids are expensive and many dual income homeowners find that it takes most or all of their second income to pay for daycare. Depending on their income bracket, the additional tax consequences of the second income can put the couple into a tax bracket that makes the second income more of a minus than a plus.
Many Americans are suffering financially because they over-extended their mortgage capabilities or did not plan adequately for life’s little detours. When a couple’s economic circumstances change (i.e. children, income reduction, job loss and/or illness) a home can become a liability pretty quickly if paying the mortgage becomes a challenge.
By expecting the best but planning for the worst-case financial scenario, couples will be able to weather the ups and downs of their financial life together.
Buyers, what planning have you done to prepare for the potential challenges of home ownership?
Homeowners, did you plan ahead or fail to plan well when you purchased your home and what were the results?Since hindsight is 20/20, what advice would you give our first time home buying readers about the best way to plan ahead for home ownership?
