5 Reasons to Spend Less on Your Home Purchase
Yes, I am a real estate agent and I'm saying this. Sometimes, you should spend less on a home. I know it is difficult to turn down when someone wants to give you more money - but of course, they aren't really "giving" it to you, right? It comes with strings in the form of those monthly payments that crop up with mundane regularity. Often, I find that high wage earners in particular are put in the difficult position of being offered a higher mortgage than may be reasonable. But, this advice applies equally to anyone looking to purchase a home. Less can be more.
Contrary to what some folks will lead you to believe, there are other important things to consider --rather than just whether the bank WILL lend you the money -- when you are buying a home:
Food -- Food is great, in fact, I eat some of it every day and you probably do as well even though you probably don't realize it. Some of the stuff is actually very tasty - especially carbs. And, some of it is very expensive, like restaurant food. So, if buying this home will cause you to have to give up too much of your food eating habit, you may want to re-think it.
Utilities - The Ponderosa was a great little spread, but prudent little child that I was, I often found myself wondering how much it took to heat the joint. If you are looking at homes, you should be wondering about that too. An extra 500 square feet, is also an additional 500 square feet to heat. Ask the current owner for a copy of their utility bills, and consider the fact that if you have more people in your household that bill could be higher. If you are buying a foreclosure, and getting the bank to provide bill copies is not a realistic option, you may be able to get the information from the utility companies directly. There is no sense in buying the Ponderosa if you and Hoss have to stay huddled up with a space heater because you can't afford to heat the place.
Vacation - One of the big reasons I decided I didn't want to work as an attorney anymore was because of the complete impossibility of taking a vacation. I took one real 10 day vacation during those years and when I came back another lawyer was already measuring my office for his desk. Having the money but not the time to take a vacation sucks. But, not having the money for a vacation can suck just as equally. Life without vacations can be dreary - you may have bought a nice house but it would also be nice not to have to spend your ENTIRE life in it because you can't afford to go anywhere else.
Hobbies- Now if your apartment is already filled to the brim with model trains and you are on a first name basis with a representative of the Danbury Mint, this doesn't apply to you. You probably need to buy a house with a big front yard so you can have a sale. If you have a reasonable hobby you want to indulge in such as watching sports, it is important to consider whether the home purchase will allow you to continue it. Maybe you have to give up your season tickets and only go to a game or two. Maybe you can't afford the High Definition package and can only watch the network games if you buy the house. But if buying the house would result in you not being able to afford the gas to the stadium so you can stand outside and hear the roar of the crowd, or it requires you to impose yourself on your friends ALL SEASON because they can afford cable and you can't, you might want to re-think your purchase.
Retirement - If your entire retirement plan is purchasing a more ergonomic office chair, you might be fine with spending more on a home. I personally don't know if I ever would want to completely retire because I like to work, and I'd probably make a job out of my retirement. "Hey it's 2 o'clock -- my schedule says I am supposed to be relaxing!" However, due to the wisdom and experience of others on the subject, I want to leave open the POSSIBILITY of changing my mind. So, I do save for retirement, and I think you should also leave room in your budget to do the same. If buying this home means that you have to short change your retirement savings, you may want to re-think it.
The "right" house is one that will keep you in line with ALL your financial objectives. It's important to keep that in mind. Fifty thousand dollars amortized over 30 years may not seem like much, but it is better to stay within budget and be able to enjoy your life WHILE you live in the home of your dreams.
Tni LeBlanc, Mint Properties
CA DRE License # 01871795
Copyright © Tni LeBlanc 2011 *5 Reasons to Spend Less on Your Home Purchase*
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