Buying property usually means approval for a mortgage and maintaining those payments. It may be difficult for you to create a budget that not only looks good on paper, but also works well when applied to the reality of your finances. If you are trying to find ways to budget for your monthly mortgage payment, here are a few tips to help you get started.
One way to make sure you have the money for your mortgage every month is to budget weekly. Break down your payment into four equal payments. Each week, remove that amount and place into a savings or separate checking account. When the payment is due, the money is available and ready to send to the bank.
There are new software options and apps, such as Mint, that help homeowners budget in house payments and maintain those payments. They also help you with creating a savings goal geared for affordability in case you lose your job or want to make early payments. Remember, there are usually no penalties for early payment on real estate, but you should check with your mortgage lender just in case.
Direct Deposit a Portion of Income
Your employer may offer direct deposit of your pay, and if they do, they may also offer percentage options. These options allow you to allocate a portion of your salary to go to your bank and another portion to your mortgage or other bills. Once you have set this up, the money is automatically sent to an escrow account for your mortgage each month or directly to your mortgage payment.
There are several free online options available to help you budget your monthly mortgage payment. One option is FeedthePig.com, a free-to-use financial site that helps you evaluate your budget, plan for things like your mortgage payments, and challenge yourself to save more.
Everyone has hard times, and if this happens to you, simply contact your mortgage company to make arrangements. Lenders will usually work with you to postpone your payment for a few days or renegotiate your payments if you have been with them for a certain amount of time. To determine if you are eligible for this and other payment option programs, check with your bank for guidelines on late payments and arrangements. But it’s best to be upfront with your lender about these issues before you find yourself in a situation where you cannot make your payments.
Edward Johnston with Dwell360 is a REALTOR® who services the cities and suburbs of metro Boston. He is focused on his customers and his experience in the residential real estate market is extensive. Search for homes in Massachusetts and then give Ed a call.