The thought of homeownership should conjure up feelings of comfort and stability. Unfortunately, homeowners who enter into a mortgage they cannot afford find the pride and comfort they once felt toward their new home quickly replaced with feelings of pressure, strain, and anxiety.
It’s important to distinguish between the amount a lender qualifies you for and the amount you can actually afford. Leaving money on thetable is difficult, but a little restraint up-front can save you years of constant worry. Before you sign on the dotted line, take some time to consider all of your expenses, keeping in mind that they are likely to change.
Your mortgage is an expense you are committing to for upwards of 30 years. In fact, it may be the only expense that will remain constant for that length of time. While it’s impossible to predict all of the expenses you will incur over the next three decades, it’s inevitable that the unexpected will occur.
Are children in your future? Will a medical crisis reap havoc on your savings? Will your spouse decide to change his or her career path? The only way to prevent these events from exhausting your resources is to build in a cushion against the unexpected at the very beginning.
You are the only one who knows what your financial situation is today and what you anticipate it being in the future. With that in mind, it’s essential that you be the one to run the numbers. While predicting your expenses over the next 30 years is nearly impossible, there are four easy calculations you can do before you sit down at the negotiating table to ensure you do not lock yourself into a budget that’s destined to fall short.
For these four tips, click here.