Suze Orman shares the hidden financial checklist that could save you from a home-buying disaster.
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00:00I think the housing market is becoming very interesting in that I think maybe you'll see
00:06mortgage rates come down a little bit, but not a lot, so it won't make that much of a
00:11difference.
00:12I think given what's happening with tariffs and everything right now, you're going to
00:16see the price of steel and aluminum and wood and everything go up dramatically.
00:21To build a house or repair a house or do anything like that, it's going to be a lot of money.
00:27There is more inventory that's going on the markets right now, and houses are on the market
00:33longer than normal.
00:35It's not about the housing market per se.
00:38It's about your own personal situation.
00:40Is your job secure?
00:41Well, the federal government, they all thought their jobs were secure.
00:45Not true.
00:46Is your job secure?
00:48Do you have a 20% down payment?
00:51Besides the 20% down payment, do you have an eight to 12-month emergency fund?
00:56Do you have all those things in place, and can you really afford it?
01:02You best think about it.
01:04Insurance, forget about it.
01:05In many places, good luck getting insurance on a home.
01:09Insurance could be actually more than your mortgage, so you better figure out what is
01:14your insurance, property insurance, going to be to insure that house.
01:18You know you're ready to afford the home if you've had a lot of extra cash.
01:24The sad thing is a lot of you think, all right, I'm renting a place right now for $2,000
01:28a month.
01:29I find a home that I like, and the mortgage is $2,000 a month, and you think, well, obviously,
01:34I can afford that.
01:36Don't be silly, everybody.
01:38$2,000 a month of rent is not the same as $2,000 of a mortgage.
01:42Besides the mortgage payment, you have property taxes, you have insurance, you have maintenance.
01:47You should increase that $2,000 by 40%, and can you afford $2,800 a month?
01:56You know you can really afford that if for six months before you actually purchase it,
02:01play house.
02:02Put that $2,800 every month or $2,000 to your rent and $800 in a money market fund for at
02:08least six months.
02:10Do you have enough money to function well?
02:12Do you still have an eight-month emergency fund?
02:16Are you great with all of that?
02:18Are you totally out of debt?
02:20If so, you can afford a home.