A Cautionary Tale
One of my co-workers decided that she had to buy a much larger home despite the fact that her current home was fairly new and had adequate space. They did buy a beautiful big home. We were generally quite busy at work and she knew she could get all the OT she wanted. We had a slow stretch and there was no OT available. She had to sell her little cottage and nearly had to sell the new home because she could not keep up with the payments. Lenders will typically qualify you for more that you can really spend based on their formulas. When I bought my second home, the figures showed that we could afford probably $50K more than we knew from our own experience we could afford. I am very conservative about my debt, and we knew we didn't want to be house-poor. As luck would have it, we lived comfortably but were not "rich." Then my hubby took a job at a loss of 33% and I broke my back and am trying to get back to enough hours to make my mortgage payment. The last thing I want to do is lose my house. You may wonder wtf I am saying this for--the point is that with all the real estate candy that will be dangled in front of you and huge figures given for qualifying you, think about how little you would have to make to keep your house out of foreclosure. In that way, if there is a reversal of fortune (I am a Jeremy Irons fan) you will have your beloved roof over your head. And I would never recommend adding in other debt to your house payment because it is a big piece of collateral to wager against a hard time that you may face. Purchase what you can afford after allowing for payments of other debt. If you find that you can't get the house that you want, you might have to wait and save. I agree wholeheartedly with the other posts here. Also, if I were planning on staying in the house and had no plans to move every 3-4 years or so, I would stay way away from adjustable mortgages. Foreclosures are very much on the increase now for people who can't afford the adjustments. You will enjoy married life if you do not have to worry so much about being financially tight from home ownership or if something comes up. Ah, it is nice to be young and in love.
Badgerland's #1 Spurs fan.
Still crazy after all these years.