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Plan Financially for Your New Lifestyle

Gina Hillis

Gina Hillis, Broker  with Hillis Group Realty, is a well-established and highly experienced real estate professional with a strong reputation for...

Gina Hillis, Broker  with Hillis Group Realty, is a well-established and highly experienced real estate professional with a strong reputation for...

Sep 14 3 minutes read

A big part of the financial design process, is to know what you value and your priorities. A home is part of what frames your lifestyle, however the cost monthly to ownership needs to align with your financial goals.  

As part of this process of Buying a home, either for the first time, or tenth, the key to getting your ducks in a row is know your spending power.  We refer to this as discovering your HG Number – This # and dollar amount is from your income monthly.  It is an amount that represents the piece of your after tax income that will cover your monthly mortgage cost.  The qualifying rules do not use the after tax, but we believe it is the smartest approach to designing a stress free financially targeted goal. Further, by designing the plan you avoid the mistake of buying to much property and not living the life you so desire.  

Pro Tip: Just because a lender qualifies you for more debt - does not mean you want to spend more.  

If you prefer, in the exercise, jump to A2, once you complete D1 and see what is left over for A1 once you discovered all the other monthly expenses you plan so you live your life on your terms.   

Below find Expense categories A, B, C including sub-categories which cover your required household expenses; as well as planned and unplanned expenses for living your lifestyle.

You can choose to Start Here 

If you decided to leave A1 blank, Mortgage/Renters, property taxes, Insurance, utilities, you can use what is left over once you prioritize your expense plan. Then look at the Mortgage amount your H G # qualifies you for in total. Then add your down-payment. Remember to hold back 6-7% of the purchase price for closing costs and items you would like to purchase to enhance your new space.  

  • Mortgage interest rates are likely to increase in the years ahead.
  • Property taxes, Utilities, insurances,will all increase annually.
  • All expense categories will increase on an annual basis, based on various factors.
  • The value of a home and the increasing value benefits are long term.
  • Buying and selling a home for profit needs to be reviewed and thought through very carefully.

If you find these exercise difficult or overwhelming, reach out and we will happy to guide you through or refer you to our Mortgage consultant. And remember, your realtor is your guide and it is their role to ensure you stay on track and within budget. 

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