Homebuyers looking for a Colorado mortgage lender are no different from homebuyers in other parts of the country, in the sense that they usually go into the home-buying experience with a budget. Shopping around with a budget in mind makes good sense. But it is equally important to stick to that budget throughout.
It’s not uncommon for real estate agents to encourage clients to consider what they can get by spending a little more. We get it. Agents want their clients to get the most value for the amount they spend. But when homebuyers are already looking at a home at the top of their budget range, the possibility of exceeding the budget increases.
There are times when exceeding the budget is necessary. However, there are valid reasons for not doing so. Here are just five of them:
1. Affordability Is Critical
A house represents the single largest investment most people will make. In many cases, a home loan makes up the single largest bill a homeowner pays every month. Combine both and you have genuine concerns about affordability.
Affordability is defined as the ability to pay for something without stressing the budget. If you can afford your monthly mortgage payment now, you are in a good position. But what happens if taxes go up next year? Will your monthly payment still be affordable? Affordability is critical to maintaining sound finances as a homeowner.
2. Financial Stability Matters, Too
Hand-in-hand with affordability is financial stability. Because homeowners put so much money into their properties, their financial stability is affected every time housing costs go up. Exceeding the budget could put long-term financial stability in jeopardy. Between tax increases, maintenance costs, and major repairs, the chances of destabilizing one’s finances go up whenever the homebuying budget is exceeded.
3. Homeowners Don’t Need the Stress
Emotions can run wild when homebuyers are looking at new properties. Indeed, it is easy to fall in love with a house even though buying it would mean going over the budget. But all the positive emotions are quick to evaporate once mortgage payments start in earnest. The simplest way to put it is this: homeowners do not need the stress. It is better for buyers to enjoy a home they can afford rather than stress over keeping one they cannot.
4. There Are Long-Term Financial Goals to Consider
The amount of money buyers put into their homes affects long-term financial goals. Most of us have long-term goals relating to retirement, investments, putting the kids through college, etc. Reaching those goals requires sound financial discipline, and that includes not spending too much on housing.
Sticking with the budget helps homebuyers preserve some of the money they need to reach their long-term goals. Turning down a more expensive home right now might be painful, but doing so has benefits down the road.
5. Financial Flexibility Is Important
Finally, homebuyers should stick to their budgets for the simple fact that financial flexibility is important in an ever-changing world. Everyone needs financial flexibility to keep things going in the event of unexpected circumstances. Everything from medical emergencies to lost jobs can affect personal finances. Homebuyers do not need pricey mortgage payments getting in the way.
Are you looking for a Colorado mortgage lender to help you get into a new home? If so, we can help. Let’s talk about how much you can reasonably afford so that you can approach the buying process with appropriate expectations. We want to help you get the most you can in your new home without going beyond what your budget allows.