Stretching Your Budget by Peter Dellane

When most homebuyers are beginning the search, what they can afford is the most important factor. Making this important financial decision will impact you and your family's future greatly, and it is important to consider every option. Right now, interest rates are low, and home prices are also leveling off, so it is a great time to enter the market, but "How MUCH house should you buy?" is the bigger question. There are several opinions about buying a better house rather than moving into something that fits comfortably into your financial situation. Future plans definitely have an impact on this kind of decision. For example, if you plan to have children or expect a large income increase, then you might be thinking about getting a bigger house now. Even if you don't expect these things, it makes strategic sense to go ahead and buy a slightly larger space than you currently need. If you get a fixed rate mortgage, the amortization of a house will not change, giving you and your family a nice cushion against inflation, and if you begin to have more income over time while your loan payments remain at the same amount, your standard of living will continue to increase. When homebuyers move into larger homes than they need, they will almost always have no problem growing into that larger space. This is a very important thing to consider, because the more equity you can put into your house and the more the market rises, the better off you will be when you sell. If you find yourself moving every year or two, you will most likely lose money every time you move. Staying in one house is much better financially, not to mention all of the moving expenses, fees, new loan costs, furniture, etc. If you are more than confident about your future income increases, then you might consider a more expensive home and an interest only mortgage. An interest only loan reduces the payments greatly at the beginning of the loan so that when your income does increase greatly, you can handle the larger monthly payments. The benefit is that you will have the home to fit your future income now, rather than later. These kinds of loans are typical for young professionals in areas such as law or medicine who are confident in their economic future. If you are considering stretching your budget on a new home, take every precaution to make sure you can keep your finances in good shape. Do not push yourself to the absolute limit, as this will cause unnecessary stress and possibly bigger problems. You must fully understand the mortgage you are considering and the financial responsibility that comes with it. Though there are many advantages to stretching your budget and getting a better home, there are few, if any, advantages to foreclosure. Take the time to make a personal budget so that you can be sure of what you can afford.

About the Author
About the Author: Peter Dellane is the President of Ability Mortgage Group, LLC, a leading provider of the great Maryland Mortgage rates and low costs zero point mortgages. For more information on the bestmortgage loans Maryland has to offer, please visit www.marylandsmortgage.com.