In your urgency and excitement to buy a house, you may very well end up making this particularly common mistake. You’ve bought a home that, when all the costs are considered, is simply too much for you. Before you start falling into serious debt, there are a few strategies you can use to tackle the issue.
Shuffle your bills
For the most manageable situations, this is your best bet to get things under control. Take the time to map out all of your regular bills as well as what you owe. Negotiation goes a long way. Most creditors and service providers want to make sure you can keep paying them. Erase the subscriptions and non-essential bills you can’t afford. Call up your providers for a better deal. You can even call up creditors to make a payment plan that fits your finances.
Take on a tenant
A great way to shift a big portion of the burden on owning a house is taking in a tenant. Yes, it means giving up your home space, to a degree. But renting out space to a tenant is one of the most efficient money making methods of using you home. Just be aware that it comes with plenty of risks and complications to navigate. It’s a good idea to get legal advice on your responsibilities as a landlord, particularly one who shares a home with their tenant.
Take another look at your mortgage
Of all the costs you have to deal with, your mortgage is likely to be your largest one. If you’ve been having trouble with your payments, you can slip into serious debt very quickly. Before you get too deep into that, do as you would with other creditors. Let your mortgage providers know that you’re having trouble making those payments. With the right help, you might be able to renegotiate to a deal that has lower monthly payments and even fixed interest.
If you get into a home and you quickly start realizing that you can’t cover the costs, then take action. When you’re in there early, it might be worth changing your mind and downsizing instead. Downsizing might not only mean selling your home for a smaller and cheaper one. It can also mean having to get rid of some of the possessions that will no longer fit in your new home. But in getting rid of those possessions, you can actually make a bit more money to keep you afloat while the process is ongoing. If you’re able to sell your home at a reasonable price, then you can use that to pay a bigger down payment, making your future mortgage a lot more manageable too.
The problem of buying too much home for you is best solved by simply being more prepared. Make sure you’re accounting for all costs when buying a home, not just the mortgage. Of course, there are some times that life throws an unexpected twist your way, taking that preparation from underneath you. The strategies above should hopefully help you in those crises.