So you’ve gone to your lender and they say you qualify for $250,000… what’s your budget? Please don’t tell me $250,000. Yes, you do qualify for that much but do you know what that would translate to as a monthly payment? If you don’t, you need to take a step back and figure it out. Your lender can give you a breakdown on what your suggested monthly payment would be and I highly suggest you get one. Your monthly payment consists of principal, interest, taxes, and insurance. In most cases, you have to include mortgage insurance in that monthly payment as well. You also need to calculate how much you will be paying up front for your down payment and closing costs. You can’t just divide up $250,000 for 30 years and get the number. It doesn’t work that way.
Now that you’ve done all that, let’s think about utilities. Where there is a significant square footage increase, there will be a significant utility bill increase. Yes, even if it is an energy efficient home. If you have your eye on a specific home already, you can call and get the average monthly cost from the utility companies. Are you moving closer or farther from your job? You will need to add in the extra gas to your monthly budget. What about furniture? If you live in a one bedroom apartment and you’re moving to a 4 bedroom home, you will need to make one heck of shopping list. 3 more bedroom sets, 3 more mattress sets. Ok, maybe you will make one an office… you still need a desk and several shelves. Maybe a filling cabinet. You have your own yard now… do you have a lawn mower? This stuff will not come cheap so please, please, please add it to your budget now. I want you to succeed. I want you to purchase a home that you will be able to stay in as long as you so desire. So please, be realistic about your budget. If you don’t calculate these things before purchasing, you’re in for quite the rude awakening.
My husband and I are saving up for a home. We don’t really know what or where we want to be yet so we are just going to keep on saving! In the meantime, we are living in a beat up old mobile home on beautiful Bell Cow Lake. It is TINY and I don’t think the word “used” could describe anything else on earth as well as it describes this little place. Think of the nicest single wide mobile home you’ve ever seen. Now cut it in half and beat it with a sledge hammer for about a year and there you have it. Home sweet home. It’s cheap, it has hideous flowers all over the walls, and the insulation is nonexistent but guess what… we love it! The view from the front door is just perfect. Trees, lake, fur children. It can’t get any better. But our favorite thing is the price. By sacrificing space and quality now, we are paving our way to a much more comfortable future. And let’s just be honest here… we are kicking our debts ASS!!! Sure, we do indulge here and there. Everyone should. I mean, if we didn’t spend so damn much on groceries at Walmart, we could have bought a nice big home a long time ago. We love to go to the boxing matches over in Shawnee every couple of months. We hit up the little Mexican joint in Chandler for dinner now and then. Maybe a movie if my husband thinks he can stand it. These are things we love to do. Things we don’t want to stop doing. If you buy a home at your maximum budget, will you still be able to do the little things that you love to do? NO! You won’t be able to afford it. Well… that and you won’t be able to stop cleaning because you have so much house that you have to continue cleaning 24/7 just to keep up with it. Just keep scrubbing. Just keep scrubbing.
All I ask is that you choose the best home for you, your budget, and your time. A big house will definitely impress your friends and family, but is it worth the financial turmoil and all the stress that comes with it? Is it worth giving up date night, spontaneous dinners, and fun events? Is it worth giving up free time so you can keep it looking shiny and new? Make a budget. Make a list of all the things you will need. Plan ahead and make educated, conscious decisions. Because being house poor SUCKS!
Published by Kearsten Meads