Should I Buy For Love or Money?
“Oh, I so love this house! Sugar plum, it has a valley view, the air sweet up here, and the master bedroom is massive.” “But, honey, it’s at the top of our budget. Things might get tight.” “Don’t worry babes, we’ll be fine. Happy wife, happy life, remember? This is the one.”
This is a common scenario at the climax of many house shopping missions. The buyers fall in love with the house of their dreams. It checks all the boxes – the water pressure is great, it already has security enclosures and there’s AC in the master bedroom. The black granite countertop contrasts beautifully with the stainless steel appliances and, the double vessel sinks in the bathroom are divine. It’s only 2 miles from work and a stone’s throw from the kid’s schools. Perfect!
A house should be your home, your retreat. It should be the place you want to run to after a tough day at work, your entertainment zone during the holidays and the place where you make memories to last a lifetime. Therefore, finding a house that makes your heart flutter should be the primary goal, shouldn’t it?
On many occasions I have seen clients select properties which eventually become a noose around their neck. You see, it initially starts off as their dream house, the one that they’re excited to landscape and furnish with the trendiest décor. Soon, the payments start to feel burdensome. Meeting the financial needs of the household becomes more strained as there just never seems to be enough disposable income. Where did it all go wrong?
But, they are those who establish early that the love bug won’t be their demise. So, what do they do instead? They are Scrooge-like in their budgeting. As much as they are passionate about that house on the hilltop in St. Joseph, sitting on 4 acres, catching the best breeze and enjoying the most scenic view, they opt to go way below budget. They believe they have chosen wisely by picking their 4th choice, their hot house which is an hour from work, with no room for expansion and no front lawn. All of their financial obligations will be met, their bills paid on time and enough left over to enjoy a monthly family dinner on the town. But, their house simply serves as a shelter, a place for storage and to rest their heads. The house brings no extra joy, it’s simply a means to an end. Where’s the love?
Just because a lender says that you can afford a mortgage, it doesn’t mean you should pursue it. It may get you the dream house, yes, but what about the quality of life thereafter? Consider your monthly salary. After taxes are deducted, after you pay your health & life insurance, car insurance and mortgage payment, what’s left? Now, let’s take that balance and try to buy groceries, pay the internet bill, gas up the car and buy daily lunch. Are you covered?
The reality is that you want to be comfortable taking care of all of your household necessities and financial obligations. Additionally, you ambitiously want to meet various financial goals such as saving for retirement, your children’s university fund, house repairs and vacations. And, in the instance of any eventualities, you strive to put aside at least 6 months’ expenses for an emergency fund.
So, what do you do? I recommend establishing what you qualify to borrow first and assessing the terms of the monthly repayment. Alright, now be true to yourself as to what you can comfortably afford. Settle that monthly figure in your head and go back to your lender and tell them you want a mortgage that can accommodate that.
Now, put on your blinkers, stay in your lane and hunt within your budget. Trust me, there are houses with your preferred characteristics in that pool. Don’t rush it! Stay focused. You can close on your dream house and not be “house poor.” For love or money? Why choose when you can have the best of both worlds?