Buying a house is a big deal. If anyone else tells you otherwise make sure to ignore them. When I bought my first house when I was only 27 years old. I think I was still in shock a bank would loan me over $150,000. Five years prior I was a college graduate with zero vision, $3,000 net worth and no job. With hard work I was able to start a new career, save 15-25% of my paychecks, and continue to earn more each year.
I was always saving to buy a house, I knew that owning property in one of the best ways to create wealth and establish a solid financial foundation. I bought my first house after only looking for a few months. Luckily I had done enough online research I knew exactly what I was looking for. At the beginning of the buying process I submitted a few forms online and was prequalified to buy a house up to $275,000. Not bad for a kid who had a few thousand to his name five years ago.
Just because you are approved for $275K doesn’t mean you have to spend the entire amount. Instead I created my entire house buying process with only one number in mind, the monthly mortgage amount. In the previous fours years in my apartment my rent increased each year, as did my salary. But I didn’t want to overextend myself and keep planning for continual raises. This leads to overspending and not saving.
My number one goal of buying a house was to keep the payment exactly the same as my rent payment, $1,025/month. I always joked that I wanted to keep the payment low so I could still make the payments even if I was a manager at Taco Bell. Jokingly dream job?
I know $1,025/month seems like nothing to those readers in areas like San Francisco, New York or Southern California. Regardless of where you live when you start deciding to buy a home you need figure out what your monthly payment will be. Unlike renting your monthly payment will remain the same over the 20 or 30 year fixed loan. The only fluctuations would be property tax or insurance. These increases will be very minimal compared to yearly rent increases.
How do you lower your monthly mortgage payment?