Overextending your budget is a mistake new homeowners often make. While your mortgage broker helps you to secure a source of lending, you worked hard to save for the down payment. What many do not realize is that you still need to keep saving money even after you have finalized the purchase.
Keep Building Your Savings
Buying a home with the maximum payment you can afford makes it difficult to keep your expenses under control. One of the best ways to guard against this pitfall is to over budget for your personal savings instead. Commit to setting aside money for yourself during the home buying process. It keeps you grounded in reality and gives you a funds to fall back on if things go wrong.
Repairs Are Always Unexpected
You are going to have to fix things that break, and you will have to pay for those repairs. As a renter, your cost to maintain your living structure was all included in the monthly rent. The landlord budgeted for repairs and paid for them as a business expenses. Many new homeowners overlook this cost and fail to realize that their homes will not stay in good shape without work. As a general rule, budget about two percent of your home’s value for annual repair costs.
It Takes Money to Have Some Fun
You are going to want to have some fun too. Over extending your budget puts you into an uncomfortable situation where your entire working life is spent trying to earn enough to keep your home. This leads to burnout. Resentment that can creep in and start to affect your personal relationships. Budget enough cash to stay happy and active.
Your home is a major investment. You want to have a secure financial structure that will ensure that your purchase stays profitable for you in all aspects. If you have gotten yourself into trouble with a payment that is barely affordable, your mortgage broker may be able help you to refinance.