STEP 1) Look at the monthly cost of renting a place near those you would like to buy, but can’t afford.
STEP 2) Subtract that rent cost from the maximum house payment you think you can afford (include principal, interest, insurance, PMI and property tax).
STEP 3) Rent in a good place closer to work, and put the difference between your rent and your max payment in the bank. Build up a down payment and wait for the market to drop for 3 years, or 5 years. Buy a subscription to this site and when Prof. Piggington decides to buy, the market is probably pretty low.
STEP 4) Don’t panic buy when rates increase. As you get older, you will find you can afford more and more each month. It is OK to buy when rates are high if you can afford the payment because you can always refi later when rates drop.
So, lets say you can rent a place for $1,500 per month, and you can afford a $2,000 payment right now. Go rent a place for $1,500 and put $500 in the bank EVERY MONTH.
Look to rent a place from a landlord who has owned the place for a long time and doesn’t have more than a couple rental properties. If you rent from someone who bought recently, they will be need a very high rent to keep themselves afloat and you might find the place sold out from underneath you in a panic sale.
LLs who have owned for a long time are going to look for a good renter, rather than lots of cash. Wear business casual clothes when you view the property, look clean, etc.
