Many people look forward to the day when they will become homeowners, without realizing the amount of time and money that goes into owning a house. If you are not careful, you can easily become house poor and put all of your money into your house and have little left for anything else. Here are a couple things that you should do before you purchase a house to ensure that you don't become house poor.
1. Don't Let The Bank Tell You What You Can Afford
Before you go into apply for the mortgage, decide how much you think you can afford each month. Calculate how much would like to put toward retirement, savings, regular living expenses, and so forth. Then determine what the right house payment is for you. When you go into the bank they may give you a higher number than you originally anticipated. Even though the bank is willing to lend you this much money, don't be fooled. You will need to increase your monthly payments and it will affect your budget. Instead, stick to what you already determined you can afford and go by those numbers. This will help to protect you from becoming house poor.
2. Don't Forget About Extra Expenses
If you have been renting up to this point, then you probably haven't had to cover the extra expenses of owning a home. For example, if the water heater breaks down, you call the landlord. However, once you own a home, you are responsible for all of these repairs. You will need extra money to pay the plumber, replace appliances, buy landscaping supplies, purchase furniture, and so forth. If you don't factor in these extra costs, you could easily become financially strapped.
3. Don't Buy Everything At Once
When you get into a new home, you may be tempted to do everything at once. You may want to decorate each room, put in a fence, finish the basement, and so forth. However, give yourself some time to build your home as your budget allows. Don't add another loan or finance these things if you can help it. Adding additional payments to the house can cause problems for you in the future. For this reason, take your time to get the house just perfect to make sure that your budget can allow for it.
By doing these simple things, you can protect your wallet and make sure that you can afford the house that you buy.
For more information and tips, contact a local mortgage broker in Bonnyville.Share