MOST IMPORTANT in my opinion: Get a "fixed rate" loan when you do buy. Those ARMS (adjustable rate mortgages) can kill you and make you lose everything if interest rates take an upward hike. Yes, you will pay a little higher interest to lock in on a fixed rate...but you will always know what your payment will be. No surprises down the road.
Also, when we bought our farm - we made darn sure that we could afford the payments even if we both lost our jobs and one of us could only get work at McDonalds.
BEST ADVICE:
1. Work hard now...save EVERY PENNY that you can. Buy AFTER the big bust when prices are much cheaper.
We bought our farm in the mid 80's when the economy was really bad. (Just 2 years before us, a young couple had bought our farm and paid twice as much as we did. They could never afford the payments - not even the interest payments and lost it after only two years).
2. Stretch your mortgage out as MANY years as possible (so if times get hard you are not obligated to a huge payment)... BUT PAY IT OFF EARLY by having the discipline to make extra payments EVERY MONTH (as much as you possibly can-even if it means you don't eat out, or you don't get satellite TV).
3. Look up, read AND LIVE BY Dave Ramsey's financial advice..."Live like no other now - so tomorrow you can live like no other". In other words, forego much of what your peers do now for enjoyment - so that when you are a little older you can live debt free. Then when your peers have to keep working until age 70 because they cannot afford to quit working - you will be living debt free, can maybe retire much younger than they can... and do things that you enjoy because YOU can afford it.
EDIT: P.S. This does not mean that you can never take a vacation or do anything fun... but it just means you cannot do it until you have saved up a big cushion of cash and gotten rid of as much of your debt as possible.
This post was edited by SweetFeet at 04:33:11 12/12/12 2 times.
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Today's Featured Article - Oil Bath Air Filters - by Chris Pratt. Some of us grew up thinking that an air filter was a paper thing that allowed air to pass while trapping dirt particles of a particles of a certain size. What a surprise to open up your first old tractor's air filter case and find a can that appears to be filled with the scrap metal swept from around a machine shop metal lathe. To top that off, you have a cup with oil in it ("why would you want to lubricate your carburetor?"). On closer examination (and some reading in a AC D-14 service manual), I found out that this is a pretty ingenious method of cleaning the air in the tractor's intake tract.
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