Let's face it: buying is an emotional experience--from the shopping, to the negotiating, to the final exchange of hard-earned money for goods that have just become yours. Many times people fall in love with a house and make a decision because they're caught up in the excitement of the moment. That heady feeling can carry them all the way through to home ownership, without thinking about the actual costs of keeping and maintaining a home. In addition to taxes and insurance, there are also utilities such as electric, heat, water, cable, and telephone. Regular maintenance and repairs also have to be factored in, as well as seasonal fluctuations.
Favorable conditions and a good credit score may contribute to you being able to afford to buy a house, but they can't be counted on to help you afford to keep it. The simple solution is to remind yourself not to let emotion play a part in your decision to buy. But that can be harder than you realize, especially for first-time homebuyers.
Picture this: You and your significant other have been shopping for weeks, and you've lost count of the number of houses you've looked at. Then suddenly you see the home of your dreams with the perfect kitchen and the little porch that you've always wanted. And now you'll make any justification, rework all your budgets, cut any corners--just to find a way to afford this house that you must now have. And your significant other, instead of being that voice of reason that you need, is also swept up in the moment, and is ready to double-down on the emotional commitment to this house because you love it so. When all is said and done, the two of you manage to put everything you had into buying a house that you now have to struggle to keep.
Don't let this happen to you. Set limits for how much you're able to spend on the purchase before you start shopping. Use online Total Cost of Ownership calculators such as http://www.freddiemac.com/homeownership/calculators/ to help predetermine how much your dream home is really going to cost. Create or revise your budget right away as soon as you know what your new utility bills are likely to be. And keep a safety buffer--especially for the first two or three years--to insulate yourself from unexpected or fluctuating costs.
It's not nearly as exhilarating when you let a well-thought-out spreadsheet determine the course of your life rather than an emotionally charged, spur-of-the-moment impulse, but the pay off in the end is much, much greater. Not only do you want to find the right home, but you want to make sure you enjoy it and not have to struggle to keep it. Coldwell Banker Rizzo Mattson can help you find the perfect house, and will work with you to make sure that you can afford to own it for many years to come.