When you apply for mortgage pre-approval, a lender will tell you how much money it’s willing to give you to buy a house. If you plan to have kids in the future, it may be a good idea to take out a smaller mortgage than you can afford so you’ll have funds available for other expenses and changes in your lifestyle.
The House You Buy May Need Work
People often move into a house and then discover that it has issues that weren’t noted in the inspection report. Even if you buy a home that’s in excellent condition, you may realize that the layout doesn’t work well for a family with a toddler. If you have a few children, you may need to add another bedroom or bathroom in the future.
All of those changes will cost money. If you keep your monthly mortgage payments down, you’ll have flexibility in your budget. That will make it easier to pay for renovations and upgrades down the road.
Raising a Child Is Expensive
Diapers, food, clothing, toys and all the other things that babies and young children need cost a lot of money. New parents are often surprised by just how expensive it is to care for a child. If you go back to work after your baby is born, you can add the cost of childcare to your list of monthly expenses.
All of that, combined with high mortgage payments, can strain your budget and leave you feeling overwhelmed. Taking out a relatively small mortgage can help ensure that you’ll have enough money to cover all the things your kids will need and that your family will be able to live comfortably.
You May Decide Not to Go Back to Work
Sometimes parents intend to return to work after a child is born but decide to stay home instead. Parents sometimes return to work, then discover that balancing a full-time job and the demands of parenthood is harder than they expected. Some parents conclude that working doesn’t make financial sense due to the high cost of childcare. Parents may also stay home to care for a child with special needs or to spend as much time as possible with kids while they’re young.
If you and your spouse take out a mortgage assuming that both of you will keep working, then you decide that one of you should stay home with the kids, you may struggle to keep up with your loan payments. If you borrow a smaller amount, it will be easier to get by on one income.
Think Things Over Carefully
Every family’s situation is unique and circumstances can change. Don’t just think about what you can afford today. Consider what your future children will need and how your life may change in the years to come. Borrowing less than you can afford to buy a house can help you be prepared for changes and challenges that you may face down the road.
