Has anyone ever heard of “Playing House before Buying a House?” I give this advice to anyone I come across that shares with me that they are interested in buying a home for the first time.  The first thing I tell them is “DO NOT LET THE BANK TELL YOU WHAT YOU CAN AFFORD – YOU TELL THE BANK HOW MUCH YOU CAN AFFORD!”  Important factors, such as (1) you like to save money; (2) put gas in your car; (3) eat out from time to time; and (4) take a vacation once a year are not taken into account during the approval process.  For instance, you may qualify for a $300k home through the bank, but your finances actually say that you qualify or a $265k home.  The second thing I tell them is to use a mortgage calculator (i.e. VISUALIZATION) to see exactly what a “comfortable” house payment is for you.  (http://www.mortgagecalculator.org/).  This calculator can help you find out exactly what monthly mortgage amount will fit into your budget to allow you to achieve the factors (or expenses) listed above, like eating and driving to work. Here’s where the “playing house” aspect comes in – or 3rd piece of advice – Start putting aside the amount of mortgage you will be paying BEFORE you purchase that home and see how that feels to your lifestyle.  If it stings too bad – this means you need to go back to the drawing board and re-evaluate either the amount of mortgage you are comfortable with or your spending habits.  This will give you a great outlook on what your life will look like once you commit to a 30-year mortgage. You do not want to learn a lesson the hard way of buying too much house!

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