A home purchase is an exciting time and it’s easy to let that excitement cloud your judgment. There’s always the temptation to stretch your budget or get the most expensive house you can afford. The only problem is giving in to this temptation could only set you up for headaches and financial hurdles for the years to come.
Your Financial Limit and Being House Poor
When a lender pre-approved you for a mortgage of a specific amount, for instance, do take note that this figure is not what you should aim to spend. That number is the maximum amount of loan you can borrow. While there is nothing wrong with buying a house that you absolutely love, it is not advisable to buy at the top of your financial limit since there’s always the risk of being house poor.
Expenses for Rainy Days
Mortgage companies in Tempe note that monthly payment shouldn’t take most of your income. It’s still important to allot money for other expenses, such as home repairs, children’s education, retirement saving, travels, and other future goals. Keep in mind that rainy rays and unexpected expenses come along and your financial situation shouldn’t make it much of a struggle to handle.
Stretching Your Budget a Little
Many would agree that buying a less expensive home is a wise financial move. In some cases, however, it’s fine to stretch your budget a little, but only if you have a solid plan. If you, for instance, have guaranteed substantial pay increase, you may consider buying a more expensive house. Then again, it’s still best to sit with a professional or a mortgage consultant to discuss your decision.
Think of the Future
Your mortgage payment should not only be manageable today, but for the entire term of the loan. This is why you need to plan and think ahead. If your household, for instance, is supported by two incomes but one of you is planning to quit a job and become a stay-at-home parent, consider your reduced future income when buying a home and getting a loan.
Buying a home is a serious financial undertaking. This is why when making a decision, be sure to make a serious consideration of your finances and other factors that would affect your future. Meet with a reliable mortgage lender to help you with an informed decision.