Congratulations on your home purchase and welcome to the world of home ownership. Almost every family who has purchased a home remembers those early years of home ownership that we thought we 'd never endure. Here are some tips to assist in getting you through the lean years when folks sometimes say they are “house poor.”
1. Start in the garage. If is there a great car in the garage for which you are making big payments, you aren’t housed poor, you’re “car poor.” sells the vast, beautiful car and get, rid of the payment. Buy a clunker for cash and drive that for a year or two.
2. Check your W-4 (1. Usa. Gov/aAqpWr). When you bought a home, you may have been out of a position to exceed the standard deduction for your income tax return because the mortgage interest is deductible. (If you have a modest home and you financed at very low interest rates, you may not.) Talk to your tax advisor to determine if your mortgage interest would enable you to file a new W-4 with your employer, changing the number of “allowances” you claim. Increasing the number of allowances will decrease the taxes withheld from your paycheck and also reduce the refund you’ll get after you file your return.
3. Sell the big boy toys. You hear the old saying that the only difference between men and boys is the cost of their toys holds some truth. If you have four-wheelers, RVs, expensive hunting and fishing gear, you may need to be sold some of this. If you still have loans on any of this equipment or have credit card balances that can be reduced by selling it, this is a giant step. It would be far better to sell a RV that gets used three weekends every year and one week every summer than to lose your home, right?
4. Cut back. In the first years of home ownership, it is customary to find yourself cutting down eating out, entertainment, vacations, hobbies, etc. Discretionary spending becomes a thing of the past at a time.
5. Ask for a raise. Your financial circumstances don’t really interest your employer. Your boss isn’t going to give you a raise because you purchased a home you are seeking to afford. That said, if you haven’t had a raise in a while—and that’s a lot of people these days—and your company is thriving again, it isn’t crazy to make a thoughtful request for a salary increase.
6. Get another job. Just after buying a home, is a scary time to change jobs—changing jobs are risky. If you’re convinced you’re under paid, you can look for a higher paying job. If not, you may look for moonlighting opportunities that you can hold down just until your income at your primary job catches up to your expenses.
7. Sell the house. This should be the last resort. After the housing debacle of 2008-2010, mortgage lenders learned their lessons. They had allowed people all across America to buy homes they couldn’t afford on the hope that the home would appreciate and bail everyone out. If you just recently purchased your home, the mortgage lender should have been convinced that you actually cando not have the means to make the payments. If something has seemed to be income or the lender somehow goofed and you really can’t afford the home. Sell it. Your down payment may be lost forever, but if you lose the house to foreclosure, not only is your nominated payment lost but your credit is, too. If you can’t make it, sell it before they say he took it.
Home ownership is a great way to build a stable and happy home life for your family, giving you the opportunity to pose roots in a community, build lasting friendships and help your children succeed in school. Making home ownership a priority in your financial planning is wise. Almost always there are means to make ends meet during those first few years of home ownership. Keep your head up. Lots of people have been given it before you and you can, too.
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