After years of saving and hard work, you’ve finally decided that it’s time to find your dream house. Buying a new home creates a lot of excitement, and also a process that requires you to fix your credit scores and prove your tax returns for a mortgage. You thought you wouldn’t make it, but your lender says you’ve qualified for a loan.
A Dream Come True?
Owning a home is the ultimate goal for many, but what people fail to realize is the mistake they make is underestimating how much they need to spend.
Before you make that life-changing decision, here are other monetary concerns to consider. You may be living in the house of your dreams, but end up barely making ends meet.
A Safety Net of Funds
Spending on a house situated on a perfect property can be enough to tempt buyers to commit to repayments without considering other living costs. The high expenses may leave you with little or no room for property tax, building maintenance, household running costs and emergencies. If you opt to dig into your savings, you’ll end up deferring the problem and losing out on interest.
The Non-Home Expenses
A lender may see that on paper, you’re capable of paying for mortgage, but your circumstances may tell you otherwise. A lender looks at how qualified you are by looking at your credit, payments, and debts. What they don’t always see other expenses that may influence your ability to stay financially afloat.
Retirement
Young adults today rush to take their first steps on the housing ladder, seeing the purchase as an investment for the future. House prices, inflation and the economy fluctuate, so to provide financial security for the future, the house should be a part of a broader financial portfolio instead of the only investment for retirement. By paying off a large mortgage, you are putting off saving for your retirement.
A Dream Living Situation
You may not be able to afford your dream home just yet, but you can calculate a budget that is realistic and allows you to pay off other expenses. Your dream house may be out of reach now, but obtainable later.
By easing your cashflow situation, you have more scope to improve the items in your new house. These other home essentials may include:
Cost-Efficient Power
With the money saved from a smaller mortgage, you can invest in energy-saving devices that reduce costs. For example, living in a sunny climate like Utah, you can invest in solar panels. Solar power not only increases property value, but it is an environmentally friendly way of cutting down the electricity bill.
Improved Security
Many homeowners underestimate the safety of their own home and realize its importance when it’s too late. Buying sturdy door locks and automated systems add layers of security to your property for an effective deterrent and peace of mind.
Quality Mattresses
Often ignored, the amount of time you spend in bed means that you need to change your mattress after it becomes saggy and restricts a good night’s sleep. Moving house is provides an excellent opportunity to dispose of your old mattress and find something more comfortable
Quality Appliances
With the cost of a move, cheap household appliances may seem a good idea until they breakdown. Skimping on quality often ends up the more expensive option, so look for reputable products that will last.
A dream home can be a reality on the surface but can hide a long-term financial burden. A dream home can only become a reality when you can afford the needs of living in one.
