There is no doubt that purchasing your first home is an exciting time. After all, you have worked hard to get to this point and it can feel like the dream is finally coming true.
The financial side of buying a house may not be as interesting as how you are going to decorate your new abode, but it is vital for you to understand.
Take advantage of the free and comprehensive mortgage calculator at moneysupermarket to get an informed picture of your expenses. It is surprising how the unusual bills or costs mount up and can become overwhelming.
People who are money smart will tell you that being able to meet mortgage repayments is one thing, but being able to live comfortably is another.
You need to be able to afford the mortgage and then the bills, including unusual or unexpected ones. It is easy in the excitement to overlook these crucial factors.
The mortgage calculator will illustrate how much you can afford for your dream home and you can then decide how much extra you will need to run your house.
Firstly, account for the obvious bills, such as utility costs and buildings and contents insurance. Insurance will give you peace of mind and help should the worse happen.
Then account for the unusual costs that are often overlooked, such as car repairs and medical bills. Industry experts suggest putting aside around $50 dollars per month to use should the unexpected occur.
This may sound like too much money, but remember that when it comes to cars, even small repairs can be costly. When it comes to your health, medical bills can be even more so.
We have all heard those sad and awful stories of how an unfortunate injury or illness can swallow up an individual’s financial resources, eventually leading into foreclosure and bankruptcy.
This can happen to anyone in modern day America, so the key is to only purchase a house within your financial comfort zone and with enough leftover to dedicate to other needs, should they arise.
Of course, if you live some distance from your loved ones, emergency travel should they become ill will always cost a considerable amount.
It is unfortunate but if you need to travel for an emergency, you will often have to pay the highest fares due to the lack of availability and notice.
So bear this is mind when you calculate your finances. Any change in life circumstance, for you or in the lives of loved ones, can have a significant impact on your financial wellbeing.
Happier changes in life circumstances, such as a wedding or pregnancy, can also bring financial changes. If you feel these are on the horizon, there are steps you can take to prepare.
Firstly, include in your calculations a certain percentage that you can save in a high-interest account or similar. Even little amounts add up over time, so don’t fall into the trap of thinking it’s either $500 dollars per month or nothing. This is a rookie mistake! Individuals who are good with their money know that saving anything is better than saving nothing and that these small amounts can mount up nicely.