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| Can You Really Afford That Mortgage Payment? |
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A macaroni millionaire is an old term for people who buy a
house that makes them look rich, but they can only afford to eat
pasta because of their giant mortgage.
Finding the perfect
house is almost as difficult as figuring out how much you can afford
to pay for it. Sure, some mortgage brokers will try to give you a
formula to help you figure out how much house you can buy. But how
many big life decisions can you make based on a simple formula?
None. Everyone has a different lifestyle, different expenses, and
different goals.
For a more accurate way of figuring out how
much you can afford, take a close and realistic look at your income
and expenses. A good mortgage broker can do this with you and help
you figure out this detailed equation, which is much more effective
than relying exclusively on a simple formula.
Remember that
buying a house comes with several big expenses above and beyond your
mortgage. Consider:
- Local taxes and insurance. They can make your PITI
(principal, interest, taxes, and insurance) payment significantly
more than you had planned.
- Closing costs. It will cost at least a few thousand
dollars simply to purchase the home.
- Real estate transfer tax. Some areas that are trying to
restrict growth or raise money for conservation will add an
additional tax on real estate transfers. For example, purchasing a
home on Cape Cod comes with an additional tax.
- Home improvements. Renovation and construction needs
can surprise you after you move into a new house. Be sure you know
ahead of time what changes you will want to make and how you will
pay for them.
- Furniture. You'll want to fill your new home with
furniture you love. Be sure you're not flat broke after you close
and end up eating dinner from a turned- over moving box for more
than just moving day.
- Commuting expense changes. With gas as $50 a tank for
many people, a move that entails doubling your commuting time can
have some significant financial consequences.
It's also
important to remember to take your own expenses and lifestyle into
account.
- Are you saddled with big student or credit card loans?
Consider the debts you have to pay every month.
- Do you like to drive the latest and greatest new car?
Will you always have an expensive car or is your favorite type
of car the type that is paid off?
- Do you like to take a luxurious vacation every year?
Some people would rather a quiet week at the Cape with friends.
Don't empty your vacation account if it's something that means a
lot to you.
- Is your kitchen stocked with just drinks and cereal? If you
dine out frequently, and never bring your lunch, consider what you
spend on food each week.
- Does quitting your job and backpacking around South
America sound like something you are planning in the near future?
Consider how long you will be able to enjoy your current job and
salary while still enjoying your life.
Once you have taken
a good look at all of your current and potential expenses, you will
have a much better idea of what you can afford. You then can go into
house hunting confidently, without being tempted to get that house
that's "just a teeny bit" more expensive.
Remember, too,
that although you may be prepared mentally and emotionally to buy a
house, you may not be ready financially. There is nothing wrong with
that. Many of us want the American Dream, but not at the expense of
drastically changing our lifestyle.
A good mortgage broker
will sit down with you and go over your expenses, lifestyles, and
goals. She or he will match those up with what you can afford for a
mortgage. Do some of your own research, too. Ask family and friends
about any unexpected expenses they incurred when they bought their
house.
Take the time to make sure you don't become a macaroni
millionaire!
Visit
our website today for more tips on how to make smart mortgage
decisions!
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| May's Home Value Improver |
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Stage Your House For Optimum Showings
The days
of staking a "For Sale" sign in your front yard and making the beds
as your only preparations to selling your house are over. In today's
competitive real estate sales market, a house that is "staged" well
will stand out in a buyer's mind. You want to create a comfortable,
warm feeling to potential buyers who will be able to imagine
themselves pleasantly living in your home.
Take these
important steps to make your house more attractive to buyers:
- Remove clutter, which is your worst enemy. Make sure
that entry closets, garages, and other potentially crowded areas
of the house are neat and sparse so that potential buyers can
imagine their own items there.
- Let the sun shine in! Open drapes and curtains to let
the light in. Everyone loves a home with good light.
- Clean out your fireplace and arrange fresh logs. You
may even want to put a fire on it is cold outside. This will give
your house an extra cozy feel.
- Keep pets, and all evidence of them, out of sight. Not
everyone sees love in the eyes of dogs and cats. Some see litter
boxes, allergens, and odors.
- Keep your refrigerator clear of magnets and photos. You
may think this is silly until you do it, and see how much nicer
the refrigerator looks.
- Remove too much personalization. Your hockey trophy and
the photo of your fraternity brothers may mean the world to you,
but a potential buyer wants to imagine him or herself in the house
- not you.
- Hang the cleanest towels you have in your bathrooms. Do
not overlook this detail, which will contribute to your home
looking fresh and clean.
- Put a vase of fresh flowers on the kitchen table or other
spots. Fresh flowers are a beautiful and inexpensive
decoration for anywhere in the house - even the bathroom.
- Put large furniture in storage. If you have any
furniture that is large enough to make a room look small and
crowded, put it in storage to make the house look roomier.
- Set your dining room table. A dinner party setting will
make potential buyers envision themselves entertaining there -
something just about everyone wants to do in their new home.
- Don't forget the garage. Clean up oil stains and
organize storage. Potential buyers will see storage potential
better in an area that is neat and clean.
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It's been a busy month for me, as my home has welcomed a new
member! My husband, Kevin, and I had our first child on May 5.
Hannah Ruth Hill was born at 6:10 am weighing 5 pounds, 4 ounces. We
couldn't be happier, though a little sleep would be nice!
If
you've recently welcomed a new family member and a new home is in
your future, please give me a call.
I'm always happy to
answer your questions about mortgages. Consider me your mortgage
resource! Best regards, 
Debbie Siegel
President
Westchester Mortgage
P.S. You're receiving this E-Newsletter because you have a prior
relationship with me or with Westchester Mortgage. If I've sent this
to you in error, or if you want to remove yourself from the list at
any time, just click the "SafeUnsubscribe" link at the bottom of
this e-mail. |
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Click here to read my "Mortgage Minute" in
ForeclosuresMass.com's monthly newsletter. This month's column:
"Changing in the Lending Market Impacts Investors."
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