NEW YORK (TheStreet) -- With interest rates at record lows, it's hard to ignore the constant "buy now" real estate pitches. If you're renting and thinking now is a good opportunity to see what house you can afford, you are probably also thinking about what you may have to give up to buy that house.

In a survey released by

Century 21 Real Estate

, renters said they are willing to

contribute less to their 401(k)

to buy their dream home. Not a good idea, says Eve Kaplan, a financial adviser with

Kaplan Financial Advisors

in Berkeley Heights, N.J.

"The problem we often face as planners is convincing folks to postpone the 'here and now,' including enjoyable things, and focusing more on the future," Kaplan says. "It is really difficult to live on Social Security, which never was designed to be the sole source of retirement savings."

Americans are just not saving enough for retirement. According to a recent

BlackRock survey

, 58% of all 401(k) plan participants were not saving the maximum with their plans. The


also found that eight in 10 retirees regret they did not save more for retirement through their 401(k) plans.

"Contributing less to one's 401(k) could often mean sidestepping a valuable company match," Kaplan says. "It's OK to sacrifice for a home, but a better sacrifice would be to forgo the dream home -- gourmet kitchen, media room, etc. -- and retain 401(k) deferrals."

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Instead of reducing or stopping your 401(k) contributions, Ron Howard, managing principal at

Siena Wealth Management

in San Jose, Calif., recommends reducing or eliminating some other expenses.

Even if you are buying a house you can afford, Howard says, you will still need to give up certain things you were used to doing or spending on as a renter. That's because on top of your mortgage, you will have to deal with many unexpected costs as a first-time homeowner.

Sure, you could afford the house, but what about the property taxes, homeowner insurance, carpet replacement, general maintenance of the home and landscaping? To pay for these, Howard says you may have to do away with exotic vacations, expensive technology gadgets, dining out regularly or going to a coffee shop every day. Now might also be a good time to give up smoking and reduce your bar tab.

With soaring demand pushing rents to an all-time high, homebuying is looking more attractive these days. According to the Mortgage Bankers Association, the average rate on a 30-year fixed-rate mortgage fell to a record-low 3.72% for the week ending Sept. 14, down from 3.75% the previous week.

"Now could be a great time to buy and lock in your housing costs," says Jessie Foster, financial planner at

Raskin Planning Group.

"If you are in an area where the rental market is booming, you will most likely see your rent increase each year."

To determine if you can afford to buy your dream home, use this

rent vs. buy calculator

. This tool would show you the fees, taxes and monthly payments to compare with your current rent. Use this

mortgage loan calculator

to see how much interest you could pay and your estimated principal balances.

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"Another cautionary element here is folks buying more house than they can afford with an adjustable-rate mortgage. Interest rates may move much higher in the longer term, pricing some people out of the homes that seem more affordable now," Kaplan warns.

If you truly know that you can afford to buy that dream home, Howard says, go for it. But prepare to make lifestyle changes for the unexpected expenses that come with homeownership.

Just don't touch that 401(k), Kaplan says. "No home is worth jeopardizing future funding goals."


Written by Marilen Cawad in New York.

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Marilen Cawad


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