They have an emergency fund.
Home prices are near the highest they've been in the past decade -- which means if you're house- hunting, keeping things affordable is getting harder to do.
But consumer reports says take care not to get in over your head , and has some suggestions to help you avoid the debt trap.
Here's josh spreiter.
(natsot: "this is a 3 bedroom, 2 bath condo .) lizeth morales knows what she wants in a house.
(sot: lizeth morales) "if money was no object, i would have a four bedroom, three and a half bathroom, huge walk in closet."
(natsot: "these are solid hardwood floors.) most house- hunters have a long list of what they want.
But consumer reports cautions against buying a home that's more expensive than you can comfortably afford.
In a recent survey of home- buyers, one- third said they ended up spending more than they expected to -- and nearly a third put down a higher down payment than they anticipated when they made the purchase.
Tobie stanger, consumer reports money editor "the general rule, in spending on housing is you only want to spend about a quarter of your take home pay.
That's so you have money left over for other goals, for example saving for retirement or paying for education."
Tobie stanger of consumer reports says to avoid overextending yourself, start by putting 20- percent down.
(sot: tobie stanger) "it not only means you're gonna have a lower mortgage, it also helps you avoid private mortgage insurance.hat's a lot of money to save."
Also -- be sure to put money aside for improvements, repairs or unexpected budget busters.
(sot: tobie stanger) "so you have cash on hand, a lower monthly nut -- that puts you in a better position to weather a financial rough patch."
(natsot: climbing steps of house) as lizeth knows, home ownership can add many things to your life.
Don't let financial stress, be one of them.
With this consumer reports, i'm josh spreiter for news 3 now.
Some mortgage bankers use a different way to determine what you can afford -- which may lead them to suggest you take on a larger mortgage.
But consumer reports cautions that just because you're approved for a larger mortgage, doesn't mean you should be taking all of it.
Josh is continuing to look into affordability concerns in the madison area.
If you have any other story ideas, let him know by contacting him on his social media pages... or send him an email.