Though the 2007 financial crisis was a rough period in our economic history, there were lessons to be learned from it. Here are the top three things I took away from the crisis.
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What lessons did I learn from the 2007 financial crisis that still apply today?
For those who don’t remember, back in 2007, we had some troubles with home values. We can laugh about it now, but it was a tough arena back in the day. These are my takeaways from that hard period in real estate history:
- Don’t buy a home that you can’t afford. Should you stretch yourself a little bit to get the home you want? Absolutely. However, when you meet with your mortgage broker for the pre-qualification process and they ask what payments you’re comfortable with, don’t exceed reality. You want to be comfortable in the house that you buy, but you want it to be a good purchase at the same time.
- Don’t always believe that your home will increase in value. When you’re looking to purchase a house, you’re going to be living in that home. This isn’t an investment property and you’re not renting it out to make cash flow or see the appreciation.
- Make sure you have adequate reserves. Spend less than you need; if something bad were to happen, you’d want to have something to fall back on. At the end of the day, make sure you’re protected.
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When you meet with your mortgage broker for the pre-qualification process and they ask what payments you’re comfortable with, don’t exceed reality.
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When you’re looking to purchase a home, we’ll walk through these tips with you as we go through the process so that you can feel more comfortable with your purchase.
If you have any questions, please feel free to give me a call or send an email. We’ll help you understand what’s going on in the market and put a plan together for you.
