Buying a home is one of the biggest decisions you will ever make. In fact, it can have significant financial consequences, both negative and positive. This is likely your largest financial investment and as such, it will require routine upkeep and occasional repairs that could be costly. However, it also offers the potential for an appreciation in value, tax breaks, and a stable home environment. Is it any wonder why people suffer from commitment phobia during the buying process?
Are you one of these people? You truly want to buy a home in the Walkerton or Hanover area and while you’ve looked at countless homes, you just can’t commit to buying. What is keeping you from making a decision?
It is nearly impossible to successfully meet two large financial goals simultaneously. It is not unusual for couples to purchase a home in anticipation of starting a family. With a need for space, they often believe it is a smart idea to stretch their buying power to the max. This only causes unnecessary stress when they are left with a large mortgage payment, while trying to financially prepare for children.
And maybe you can’t have it all at once. It is absolutely necessary to prioritize your goals in the order you want them to happen. The more financial responsibilities you have, the smaller your piece of financial pie becomes. If you are paying down student loans, buying a car, heading to graduate school, or planning a family, keep this is mind as you determine how much you can actually afford to pay for a monthly mortgage.
FEAR OF OVERSPENDING
Lenders may consider loaning you more than you can afford to borrow and that “bigger, nicer” home may be enticing as it eliminates the need to move if your family expands. There are times when stretching your budget is okay, such as when you are positive your salary will increase, you can deal with large unexpected expenses, and your income is stable. Otherwise, it’s not advisable.
If you’re pre-qualified to buy a home in Grey or Bruce County, you may be looking at the biggest and best homes at the top of your price range. However, if you’re getting the feeling something isn’t right, pay attention to it. Your instincts are trying to reign in control of your desires. Stop! Financial advisors suggest budgeting 25% of your income to housing to ensure you have money for your other responsibilities, yet lenders usually allow you to borrow up to 6% more. Be wise. Tell your Realtor it is time to see less expensive homes.
FEAR OF THE FUTURE
Reasonable fear is normal; unreasonable fear isn’t. Address your fears by looking at worst-case scenarios. How confident are you that you can manage your money? What if your home’s value depreciates? Check out the neighborhood. If the other homes are well cared for, then it’s likely your home will retain its value. Make sure you have a reserve for repairs and maintenance to keep your home in the best shape possible.
When you are unable to commit to a home, working through your money issues will help get you moving. Whether you opt to take the plunge and purchase a home or decide to take a period of time to regroup before continuing your search, do what is best for you. Get your finances in shape and restart the hunt. Buying a home shouldn’t be a decision that paralyzes you with fear, it should be one of the most exciting things you ever do.