Buying a home ranks right up there with meeting the love of your life and having a baby. A total thrill ride that results in intense feelings of joy, excitement, stress and lack of sleep. With relationships and babies, after the initial hoopla, things eventually settle down, the emotions even out and well, you get used to the lack of sleep. The initial excitement of buying your home may settle in to happy contentment, too but the similarities end with the sleep thing…you definitely don’t want your mortgage to be keeping you up at night.
Taking a holistic look at where your mortgage fits into your short and long term financial plan is becoming increasingly important. Before the financial crisis, the average home buyer asked the bank what they could qualify for and typically looked for that exact price point when searching for their next home. The idea was that the more expensive the home, the more equity it will gain. However, the recession has encouraged us all to take a look at just what it means to have a “big mortgage payment” and the impact it has on the other areas of our lives. Is it wise to buy the biggest and best you can afford, live house poor for the first few years in order to have a good investment in the end? Or is it more prudent to buy that fixer upper, live beneath your means and have room for savings, travel and lifestyle choice.
It’s a hot topic and this article in regards to the HGTV show, “ My First Place”, throws these questions into the ring. The writers opinions are interesting enough but be sure to check out the responses as well, for instance, is it really possible to be a prudent buyer in this day and age when you want a safe home in a safe neighborhood for your family?
In any case, be sure talk to your mortgage broker about all of your financial plans, both short and long term, when applying for a mortgage to have the best chance of achieving your housing AND your lifestyle goals… as well as a good night’s sleep!