Paying Off Your Mortgage | What to Consider (Pt. 2)

Choose the home that's right for you (Photo: flickr.com)

Is your plate big enough?

CLICK HERE if you missed part one of this article.

So think long and hard about what you need in a home, because the mortgage costs are very real. Even if you are in a dual-income family, with both at the average income, the average home and average mortgage are hard to swallow. If you’re looking at a larger, nicer home with all the amenities in a more desirable part of the country, $300,000, $400,000 and up can easily fill your plate and then some.

What’s reasonable to pay for a home?

You might be wondering how much is reasonable to spend on a home. You must take mortgage costs into account. This is a difficult question to answer precisely, because everyone’s situation differs, from income to debt to living and purchasing preferences. For each person you ask, you’ll likely receive a different answer. However, try something like this and see how it works:

1. The cost of your home should be no more than three times your annual salary. Thus, if you earn around the average of $35,000, a $105,000 should be well within your price range. That won’t net you a new home anywhere, but if you shop well, you may be able to find a nice older home in a good neighborhood.
2. Consider the burden of debt you currently have, and how long you expect to take to pay it off. Whether it’s student loans, credit cards or anything else, you have to take everything into account. Mortgage costs aren’t something you can simply take on and assume you’ll be able to “make it fit” within a sketchy budget. See how all the puzzle pieces fit together. Be honest and do your homework, no matter how much it hurts.
3. Consider the lifestyle you want to maintain. If you’re single, do you need a massive home? If you’re looking for space for a family, does each child need a separate bedroom, or can you double up and save when possible? Also important, do you need lots of stuff to fill your home? Downsizing one’s life can no only save money, but help you develop a more meditative personal focus that’s as good a shield against the chaotic slings and arrows of the world as anything. Free yourself from the rat race, eliminate clutter in your home and budget and see how relaxed you’ll feel. Make sure you’re patient with yourself here; a former pack rat will need lots of time and support to sweat out that all-consuming desire for stuff. Like many other delusions that plague humankind, the need for and bondage to possessions – materialism – can easily be classified as a disorder.

Make the right choice for you

Know the home you can afford and do everything within your power to create happiness within your space. In the 1977 children’s book “The Big Orange Splot” by Daniel Manus Pinkwater, suburban denizen Mr. Plumbean has the right idea about what our home should be: “My home is me and I am it. My home is where I like to be, and it looks like all my dreams.” By accepting limitations when it comes to buying a home, rather than grieving over them or attempting to overcompensate, not only will you preserve your own piece of mind, but you’ll reduce your need to dig deep into the mortgage quagmire and put yourself on track to build a happy, healthy life you’ll like to live.