Real Estate Mogul Who Worked Hard to Make Money Warns Potential Homeowners of Common Mistakes

As the Federal Reserve's work to tame inflation sent mortgage rates soaring, many are left wondering if now is the right time to buy a home. Amid the soaring prices as well as the confusion, real estate mogul Shawn Meaike talked about the factors that people looking to buy a home should consider. "If you become locked to your home, and you can't afford to do anything else, that's not a good purchase," Meaike told Fox News Digital.

He also talked about how potential homeowners need to ensure that they are okay with the amount of income that would be available for them to spend every month if they leap. "What makes me nervous in today's world is how many people have shackled themselves to their homes. They can't afford to buy it," he said. He talked about how people should think it through and calculate how much they will have to spend after deducting the mortgage, the interest, the taxes, the insurance, and other expenditures. 

He also says that many Americans today fail to realize that living in smaller spaces is the optimized option. "Everybody says, ‘It's my starter home,’ except they want more than they can afford. So, what money will you have left at the end of the month? Run your numbers," he said.

Meaike himself has followed these steps. He began investing in rental properties in his 20s and later accumulated many properties which helped him launch his successful career. "I was running companies that were doing, you know, tens of millions of dollars a year and living in a house in places people didn't want to come visit."

He talked about how he came from a humble beginning and did not have any resources to begin with. "I worked my butt off to make my money," he tells Fox Business. He also talks about how buying a home calls for sacrifices. "Sit down and talk about it and figure out what you're willing to give up," he said, noting that young couples need to have "important conversations."  

He also stresses the importance of asking difficult questions like, "How stable are both your jobs? How stable are they? If they are stable and you've been there, and you feel good about it…but could you live on one income or a reduced income?" he continued. "So, I think those are the questions you need to be asking yourself when you are looking for your first purchase."

According to Bankrate, other factors that one should take into consideration are your credit score, and your savings for the down payment. The mortgage rates have been volatile lately, topping 8 percent after October 2023 and then again falling to 7 percent only to rise again. 

Therefore, regardless of the tips, Meaike too feels that waiting is the correct option considering the current scenario. He suggests people use the money they have put aside down payments in low-risk investments until the rates come down.