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  • Writer's pictureTara Powell

Buyer Tip: Trick To a Stress-Free Mortgage

A picture of a beautiful kitchen with a buyer tip written on it.

It can be intimidating and a little unnerving thinking about buying a new house knowing the mortgage will be higher than what you're currently paying. Will it be too much to handle? Will you have to cut out your life-style choices, like eating out? No one wants to feel like they are "house poor" when they make a move.

"House poor" is a term used to describe a person who spends a large proportion of his or her total income on homeownership, including mortgage payments, property taxes, maintenance, and utilities. Individuals in this situation are short of cash for discretionary items and tend to have trouble meeting other financial obligations, such as vehicle payments. Source: "House Poor: What It Means, Steps to Avoid It" by

This trick for a stress free mortgage will help you "try out" your mortgage before you make your move. It will help ease your concerns, or maybe prompt you to adjust your budget before you're locked into a difficult situation.

Determine your budget and start putting aside that amount before you start your housing search and continue doing it while you're searching. Here's an example:

Your current rent or mortgage is $2000 per month

Your new budgeted amount is $2700 per month

$2700 - $2000 = $700 per month

Now the key is to start putting away the additional $700 per month into saving and pretend like it doesn't exist! That's right - do whatever you can to trick yourself into forgetting about this little nest egg.

After a couple of months, really think about how this additional expense has impacted you and your family. Are you still able to eat out? Can you comfortably go on vacation? New clothes or new car if you needed it? Any other lifestyle changes? If so, are they acceptable? Have you had trouble paying other expenses? Are you still adding to your retirement and savings?

If the adjustments are just too much and your stress levels are through the roof, this is the time to adjust your budget. Think about your "must-haves" list. Is there anything that you can move to "nice-to-haves" to lower the search price?

If you can comfortably make that new payment, then congratulations! You are ready to make an offer on your new home. And, the bonus is you have a nice little savings that you can use for improvements after you move in!

Buying a new home is exciting, but that excitement fades quickly when you're feeling stressed to meet that payment every month. This tip is a great way to feel confident with your new move.

NOTE: Please remember that depending on location and other factors, like age of the house, other expenses like taxes, insurance or utilities may go up or down. You should consider the full cost adjustment when doing this exercise.

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