Keeping Up with the Joneses - Are You Trying to Buy Too Much House?

Posted by Justin Havre. on Wednesday, April 8th, 2015 at 8:00pm.

It’s easy to get caught up in the excitement of buying  Calgary house - especially if it is your first home. If you are not careful, though, you may fall into the trap that ensnares many first-time home buyers – trying to buy more house than you can comfortably afford. What throws home buyers off the most is trying to impress their friends, family members, and even associates by purchasing a bigger house than they really need.

Let’s face it. Human beings are social animals and conditioned to seek the approval of their peers. If people in your social network have 5-bedroom homes sitting on 2 acres of land, you may try to attain that as well, even if you don’t have enough money to pay for it.

To prevent yourself from purchasing more (house than you can afford, you’ll need to take a good look at your financial situation. The experts agree that your mortgage should be no more than 30% of your total monthly income. So, if you bring in $5,000 per month, you can afford a mortgage of $1,500 or less per month.

For those in a dual income situation, you should also consider whether each of you can carry the mortgage on your own. If one person loses his or her job, for instance, can the mortgage still be paid with only one source of income? Considering this will help you avoid the unfortunate foreclosure situation that many home owners find themselves in after suffering a job loss or another hit to their income.

It can be tempting to try to keep up with the Joneses and buy more house than you can really afford but keeping your mind on what’s really important will help you overcome that temptation.

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