Suze Orman Believes You Should Play House Before Buying a Home. Here's What That Means

Could playing house help you make the right financial choice? 

Are you ready to buy a home? Answering this question can be more complicated than you think, as you need to take all of the costs of ownership into account, including your mortgage, property taxes, insurance, and maintenance expenses.

Unfortunately, far too many people believe they are prepared for the added expenses associated with owning their own place -- only to find out after buying that they are in over their heads. 

You don't want this to happen to you, so you may want to heed some advice from financial expert Suze Orman and "play house" before you buy. 

What does it mean to ‘play house’ before buying a home?

Orman explained the concept of "playing house" in an interview with Apartment Guide. 

She warned would-be buyers that in addition to their mortgage principal and interest payments, they would need to cover taxes, insurance, and maintenance and repair expenses as well. And she suggested trying out these payments before committing to pay. 

How does this work, exactly? Orman explains it simply. She believes those considering a home purchase should practice making housing payments for a full six months before moving forward if the cost of ownership would be more than rent. 

"For six months, if you're renting and your rent is $2,000 a month, and I said it might be $800 more for property taxes, insurance, maintenance and other things, then for six months, I would pay my rent and then put that extra $800 away in a savings account so I knew if I could easily afford to own a home that was going to cost me $2,800 a month."

If you follow Orman's advice, you'd be able to get a realistic idea of what living on your new budget would actually be like after becoming a homeowner. 

"If you find that it was a struggle and that you were late on making that payment, you didn't like the fact that you couldn't go out to eat because of it, then you were about to buy a house that you can't afford. So play house, and you'll know how much of a home you can afford," she said.

Should you follow Orman's advice?

Orman's suggestion that you practice making your new housing payment is a really good tip for several reasons.

As she points out, you'll be able to determine if a home is really affordable for you if the costs will be higher than your rent. It's best to discover whether you can live on a new smaller budget before you actually commit to making extra housing payments for decades. By playing house, you can reduce the chances you'll regret homeownership because you'll go into your purchase with realistic expectations. 

You'll also end up with a lot of extra money in savings if you follow her advice. As Orman says, this additional money can go toward helping to cover some of the upfront costs you face when buying, such as closing fees or moving costs. 

For all of these reasons, if you're thinking of buying a house soon, you should seriously consider "playing house" ASAP before moving forward.