Budgeting for a Mortgage Refinance.

When looking for a mortgage, it’s important to know your limit and stick to it. When you sign up for more than you can afford, you risk not being able to make your monthly mortgage payments. With a home being one of the largest purchases you’ll ever make, it’s important to make wise decisions when coming up with a budget for your mortgage. Continue reading to learn more about budgeting for a mortgage!

Spending money is easy, saving is hard. For many people, saving doesn’t come easily. You see something at the store that you want that wasn’t on your original list and you buy it. Or, you take little out of savings to buy a concert ticket. These little things add up over time and can prevent people from saving the amount of money that they want.

According to Zillow, 2020 could bring a recession in the home-buying market. It’s important to consider all areas of your budget before deciding if you can take on a monthly mortgage payment.

You should budget because it puts you in charge of your money. You begin telling your money where you want it to go. According to NerdWallet:

Understand your relationship with money: tracking your earning and spending helps you paint a clear picture and notice any bad money patterns you have.
Save for the future: like for your mortgage! It’s also a good idea to have an emergency fund in case something happens so you can continue paying your bills.
Get out of debt — and stay out: your budget will show you how much money you can really send to debt. Goodbye minimum payments, hello paying off debt.
Relieve stress: budgeting isn’t going to solve all your problems, but it can help you get a handle on any stress you feel that is centered around money.

Once you have your money organized and know how much you can spend in each of your categories, use that to your advantage. You can begin saving any more money by doing things like:

Shopping more frugally: take advantage of rewards programs you can find at places like Target or your local grocery store. Check for coupons and even consider buying non-name brand items.
Spend now to save later: this sounds counterintuitive, but sometimes spending money now helps you save more in the long run. This means going to regular checkups and more before serious, costly problems arise.
Consider a side hustle: if you find you want a little more wiggle room in your budget, consider a side hustle.

Not only does your current financial standing play into you being able to get a mortgage, but so do other factors. Other things to consider before seeing if you can take on a mortgage include looking at your credit score, your debt-to-income ratio, and your gross income. These are all things that a budget can help you easily figure out.