In the movie, ”Supersize Me,” Morgan Spurlock lived for 30 days with nothing but McDonald’s fastfood. Whenever the clerk tried to upsell him by offering larger portions, he accepted them. By the end of 30 days, Spurlock was a bloated and grossly unhealthy version of the person he was the beginning of the movie. In addition, his bloodwork was that of someone 40 years older than his original bloodwork.
If you allow your financial diet to be supersized, your financial situation will also become bloated, and much less healthy than it should be. Unfortunately, balancing your financial situation is not as simple as selecting a regular portion or allowing yourself to be supersized. So, how can you ensure financial portion control?
First, you should always remember that the maximum amount of money the bank is willing to loan you is not always the amount of money you should borrow. In other words, you must carefully consider your ability to pay, and not bite off more than you can afford to chew. You need to take your future plans into consideration, to ensure you will always be able to make your payments.
Here are some typical factors that you should consider. Do you plan to pursue further education? Do you plan to start a family? Do you plan to send your children to a private school? These and other factors can put a serious crimp on your ability to make loan payments.
It is also crucial to remember that there will be many circumstances beyond your control. One of the most important of these is the interest rate. We recommend that you always allow for at least a 2% increase in the interest rate of your loan.
While nothing is guaranteed, a well thought-out plan can help protect you from the inevitable crises that occur in most people’s lives. Astute planning can result in less stress and a greater accumulation of wealth.
Always consult a qualified mortgage broker to help determine how much you can afford to borrow.
What kind of lifestyle do you prefer?
Are you frugal or do you like to live a more extravagant lifestyle? The answer to this question is very important when determining the size of your loan. The ideal loan will not affect your lifestyle. If it does, it should not force you to make unreasonable sacrifices. Those of you who like to spend more money may find it tougher to divert that money into loan payments.
The best way to determine how much you can afford to spend on a mortgage is to figure out how much money you need to spend to live every month and how much you have left over for a mortgage. Another way to do this is to do the reverse: figure out the size of your ideal loan, and then see if you could live comfortably on the money you will have left over. Between these two techniques, you should formulate a reasonable estimate of what you can comfortably borrow.
