Buying a home? Here's "Reason #1" to be Conservative

Posted on Sunday, December 9th, 2012 at 4:37pm.

If you just came from your lender and learned that you can spend more for your new home than you thought, it could mean one of two things:

  • Interest rates are lower, so you can "buy more house" for the same money.
         If this is the reason – it's time to celebrate.
  • Your lender didn't consider the other priorities in your life.
         If this is the reason – stop and think before you take his or her advice.

Some of us simply need more money left over after the monthly bills are paid. Stop and think about how you're spending that "extra" money right now, and whether you're willing to change your habits.

If you cherish a weekly night out, love to attend concerts, or need that week on the beach or a ski mountain every few months, you'll grow to resent the mortgage payment that takes those things away from you.

Maybe you want to send your children to private schools, or would like to go back to school yourself. If your mortgage payment prevents those activities, the love for your new home will wane.

Before you take a lender's word for how much you can spend on your mortgage, look at your budget.  

Consider what you're spending for housing right now and whether you're comfortable with that amount. Next think about what you're doing with the rest of your money. If you've been saving for a down payment, you might not mind spending that extra on your house payment.

But… maybe there's something else you'd like to save for now. Or maybe it would feel good to know that you don't actually need all the money you earn in a month.

Just remember this: You know better than anyone else what you can and can't afford. Don't let anyone push you into a payment that is above what you know you want to spend.

Whatever your price range, I'll be pleased to help you find your dream home, and I'll never try to push you into over spending. Just give me a call and let's get started...



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