Play House Before You Actually Buy One
Buying a house is a super exciting process, but it is also big responsibility. Before you commit, test it out by "playing house" and see if you can financially afford it. You might realize that you'll have to change your lifestyle and spending habits in order to really make it work. Balboa Realty are the leaders in Orange County Property Management & Real Estate and are here for you every step of the way!
Downloading a financial app on your phone can be a helpful and easy way to track your spending habits. The app tracks and categorizes your purchases so you can clearly see where your money goes each month. You might be surprised to see how all the small $5 purchases of Starbucks coffee and snacks add up! Smart budgeting will bring you closer to your goals in a shorter amount of time.
Balboa Realty is here to help you find the home of your dreams! Call: 949-386-8310
As a rule of thumb your housing costs should make up no more than 30% of your salary. Once you've established how much a monthly mortgage would cost you, pretend to pay this mortgage before you have a real one. For example, say your current rent is $1,600 per month and your future mortgage will be 2,000 per month. The difference is $400, so deposit $400 into your saving account every month (and don't touch it) so you can feel exactly what it would fee like if you had a mortgage of that cost.
Most likely you will have to make some lifestyle changes in order to come up with the extra $400. You might have to adjust your saving goals so you have more fluid income to work with like contributing less to your retirement account and your 401K. Going out for meals, going to the movies, and to bars can be a place where money quickly disappears. This is not at all to say that you should stop having fun all together, but it's important to be aware of how much socializing costs and to spend your money wisely. Alcoholic beverages are expensive and limiting yourself when ordering these while you're out will help you save. Be savvy by going to happy hours, using Groupon, and taking advantage of restaurant coupons and specials. Cutting down on socializing and readjusting your lifestyle is tough, but if it's for a house it just might be worth it. After 6 months to a year of paying your pretend mortgage you might have found the house of your dreams and are ready to make an offer. The great news is that all this time you've saving money and you can now use that towards your down payment!
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Published on Tuesday, March 21, 2017