If you're looking to sell your home in the near future, you'll want to consider your motivations for selling.
Many homeowners wish to move into a bigger, more luxurious home but end up over extending themselves financially.
Before you put your house on the market in order to move into a bigger home, you should take a close look at your financial circumstances and understand what you can afford.
Before you decide to trade up (that is, purchase a more expensive home), you need to carefully and honestly evaluate your own finances.
It's important to look at your situation as a whole and not just one aspect of it.
For example, you may be comfortable with a certain amount for monthly mortgage payments at this time, but what if something changes in your life and your income or expenses are altered significantly? You may be comfortable paying a specific amount for a monthly mortgage payment, but what if you decide to have another child (or he or she comes as a surprise) and you suddenly have a whole world of new expenses to consider? Perhaps you already have children who are about to enter a private school, and this is another important consideration when determining what you can afford to pay in the future.
Do you have savings, both for retirement and for emergencies? If you don't have an emergency savings fund, you're not alone as many people overlook this important requirement.
Even so, having something in common with many Americans won't give you much comfort if you end up losing your job or are unable to work temporarily in the coming months or years.
You need to save at least several months of expenses in case anything happens to your current income.
Unfortunately, far too many Americans have overextended themselves in recent years and find themselves with an overwhelming amount of debt when they purchase a more expensive home.
At the very least, buying a home beyond your means can make your monthly budget very tight and take much of the fun out of life.
You can end up worrying about living paycheck to paycheck and may simply have to forgo vacations or even saving for future education.
In the worst case, you could end up in bankruptcy and foreclosure.
It's also important to realize that only you can make this decision.
No mortgage lender can actually tell you what you can afford to spend.
A lender can tell you what you have qualified for, but you don't have to accept the maximum loan amount that they are offering.
You have to figure out how this fits in your financial situation as a whole and how comfortable you are spending this amount month after month.
Consider what would happen if your mortgage payment increased (in the case of an adjustable rate mortgage) or if other expenses popped up in your personal life.
You need to leave some kind of buffer in case things get tighter financially, which they almost certainly will at some point.
Many homeowners wish to move into a bigger, more luxurious home but end up over extending themselves financially.
Before you put your house on the market in order to move into a bigger home, you should take a close look at your financial circumstances and understand what you can afford.
Before you decide to trade up (that is, purchase a more expensive home), you need to carefully and honestly evaluate your own finances.
It's important to look at your situation as a whole and not just one aspect of it.
For example, you may be comfortable with a certain amount for monthly mortgage payments at this time, but what if something changes in your life and your income or expenses are altered significantly? You may be comfortable paying a specific amount for a monthly mortgage payment, but what if you decide to have another child (or he or she comes as a surprise) and you suddenly have a whole world of new expenses to consider? Perhaps you already have children who are about to enter a private school, and this is another important consideration when determining what you can afford to pay in the future.
Do you have savings, both for retirement and for emergencies? If you don't have an emergency savings fund, you're not alone as many people overlook this important requirement.
Even so, having something in common with many Americans won't give you much comfort if you end up losing your job or are unable to work temporarily in the coming months or years.
You need to save at least several months of expenses in case anything happens to your current income.
Unfortunately, far too many Americans have overextended themselves in recent years and find themselves with an overwhelming amount of debt when they purchase a more expensive home.
At the very least, buying a home beyond your means can make your monthly budget very tight and take much of the fun out of life.
You can end up worrying about living paycheck to paycheck and may simply have to forgo vacations or even saving for future education.
In the worst case, you could end up in bankruptcy and foreclosure.
It's also important to realize that only you can make this decision.
No mortgage lender can actually tell you what you can afford to spend.
A lender can tell you what you have qualified for, but you don't have to accept the maximum loan amount that they are offering.
You have to figure out how this fits in your financial situation as a whole and how comfortable you are spending this amount month after month.
Consider what would happen if your mortgage payment increased (in the case of an adjustable rate mortgage) or if other expenses popped up in your personal life.
You need to leave some kind of buffer in case things get tighter financially, which they almost certainly will at some point.
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