Consumer Tips

Wise consumer decisions are difficult to make without the right information. Although it seems that free consumer advice is available everywhere, we know that objective, impartial advice is hard to come by.

In this section, we offer consumer tips directly from experienced Certified Consumer Credit Counselors. Because personal finance includes an array of subjects, we've included universally helpful advice like tips on budgeting and how to read your credit report. Click on the links below to find the tips you need to make wise consumer choices.  If there is an interesting topic we've overlooked, please, let us know.  

Common Cost Cutters
What You Need to Know about Reverse Mortgages:

How to Read Your Credit Reports

Identity Theft Myths and Realities
Light at End of Tunnel for Defaulted Student Loan Borrowers

Pay Day Loans Simply Don't Pay

When Late Fees Happen to Good People
Benefits of a Spending Plan
Your Guide to Credit Reports

Your card has been DECLINED

Common Cost Cutters

For Home

For Vehicles

For Food Expenses

For Clothing Expenses

Home

• For a cooler house in summer, use your microwave, range top or outside grill instead of your oven

• Use the "no heat" drying cycle on your dish washer

• Keep your water heater thermostat under 120°

• Take quick showers or fill your tub ¼ full for baths

• Maintain and change your AC & furnace filters often

• Adjust the thermostat when no one is home & close the drapes when possible

• When possible, use florescent rather than incandescent lighting

• Close the damper on your fireplace when not in use

Auto

• Check and maintain fluids, tire pressure and oil often because it saves on repairs

• Avoid fast starts & stops to save on gas & tire wear

• Drive the speed limit to avoid tickets & save gas

• Consolidate trips, share rides or ride the bus when possible

• Take basic auto mechanics & maintenance class

• Take defensive driving class to lower insurance rates

• Compare insurance company rates – be neither over nor under insured

Food

• Study ads & plan weekly menus around specials

• Shop once with a complete list made from menus & household inventory

• Shop once a week & limit your time for shopping

• Shop alone, if possible & NEVER when you are hungry

• Take advantage of the lower cost of generic or store brand goods

• Shop in a familiar store to cut down on impulse purchases & save time

• Use coupons but only for items you would normally buy

• Compare prices of different size products by noting the unit prices

• When buying large quantities, divide & freeze remainder

• Buy fruit & vegetables that are in season

• Shop at day-old bakeries for bread products

• Let one or two all-purpose cleaners take the place of many

• Eat out less often & have cocktails or desserts at home

• When eating out, order water with your meal

• Take "brown bag" to work & use facilities like microwave & refrigerator
  
  

Clothing

• Shop at discount stores or resale shops

• Shop sales but don’t buy just because it’s cheap

• Sew and mend garments

• Buy conservative clothes that will stay in style

• Avoid garments that require dry cleaning or special care

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Reverse Mortgages: What You Need to Know

Given on-going economic woes, high fuel prices, up and down stock market and rising medical costs, surviving is challenging for Americans on fixed incomes. Some consumers 62 years and older who prefer to remain in their homes are finding relief in a reverse mortgage.

A reverse mortgage does not have to be repaid until you or the last surviving borrower permanently moves out of the house or dies.The money borrowed in a reverse mortgage is tax-free and does not affect your Social Security or Medicare benefits.

How does a Reverse Mortgage differ from a Home Equity Loan?

As stated in AARP Home Made Money, with a forward mortgage, your equity rises while your debt decreases. However, with a reverse mortgage you are withdrawing from your home’s equity, which causes the reverse mortgage to be a “cash generator”. The amount borrowed depends on the age of the youngest borrower, current interest rate, and appraised value of the home and the FHA’s mortgage limits for your area.  Also, the lower the interest rate, the more you can borrow.

One of the drawbacks of a reverse mortgage is the up-front fee total, which can include a 2% lender origination fee, 2% mortgage insurance, appraisal fee, closing costs, and other miscellaneous expenses.  As your equity in the house increases and especially if you’re planning to stay in the home, the reverse mortgage can be an attractive alternative to moving.

It is important to remember that while you do not make house payments, you are responsible for taxes and associated bills like utilities and fees. You should also know that the lender cannot take away your home if you outlive the loan. And you can never owe more than the value of the home.

Does it matter how long you expect to stay in your home?

While you cannot be foreclosed on or forced to vacate your house, the upfront costs of a reverse mortgage make it unattractive for those who plan to move in a few years.  A reverse mortgage works best for older consumers who want to remain in their home, and allows them to pay off high-cost debt, fund medical expenses or purchase long-term care insurance.

Discuss your plans with your family and heirs.

When changing your living arrangements it is important to determine what is best for you and your family. Maybe you would do better to downsize or sell and move to another home. Perhaps you have relatives in another part of the country, or an assisted living arrangement may be more practical. Everyone in your family needs to be informed of your choice.

In Summary.

Reverse mortgages have assisted many individuals by allowing them access to their home equity while paying off the existing mortgage, make needed repairs or increase their monthly income.

“Caution should be used and all options considered to determine if this type of mortgage is right for you before taking out a loan against your home,” says Diana Hamby, Certified Consumer Credit and Housing Counselor.

To learn more about our reverse mortgage counseling services contact our agency at 210.979.4300 or 800.410.2227 or find us on the web at www.cccssa.org.

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Your money going

down the drain?  

Look out for these Costly Credit Practices:

Multiple interest rates: Creditors charge different interest rates for different services like purchases, cash advances, and money transfers.    For consumers that don’t keep a close eye on which balances are being paid first, the interest can quickly become the bulk of the debt.

$34 Late Fees: Late fees now average $34 per month.  Consumers should look out for "cut off" times set by creditors. These terms set a specific hour during the day the payment must be received making it easier to pay late.

$31 Over-the-limit Fees: Over-the-limit fees now average $31.

3% Cash Advances & Balance Transfers:  Creditors generally charge 3% of the cash advance or balance transferred.                                             - USAToday.com

Up 31% Penalty Rates: Your interest can soar up to 31% if you're as much as one day late making a payment.

Up 32% Universal Default: Even when you pay your bill on time, some creditors reserve the right to hike your rate up to 32% for paying late on some other creditor's bill.

Percentages from the Government Accountability Office: www.gao.gov

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When Late Fees Happen to Good People

If you use credit, you’re aware that there are consequences for paying late. Creditors include small-print cautionary clauses in their terms and conditions about late payment fees and reserve the right to raise your interest rate for even one missed payment.

Just last month Jeanne Sahadi, a senior writer for CNNMoney.com pointed out that an estimated 70% of the credit card industry’s revenue comes from interest and penalties.  Sometimes, consumers with impeccable credit have to battle erroneous late charges due to creditor mistakes. These discrepancies are difficult to resolve because there are limited ways the consumer can prove when he or she sent their payment. Even worse, if a late payment is reported on your credit report it will have a detrimental effect on your score.

If you believe you have been charged an unfair fee, follow these steps to disputing unfair charges. 

1. Call

2. Write

3. Seek Help

Address:

Office of the Attorney General

Consumer Protection Division

PO Box 12548

Austin, Texas 78711-2548

Telephone: 1-800-538-1579
Online: www.oag.state.tx.us

Recent complaints from the Federal Trade Commission and other consumer advocates about deceptive or abusive credit industry practices have resulted in Congressional hearings. Creditors have begun to do away with clauses such as “universal default” and “any time, for any reason” charges.

A push for clearer disclosure of terms and conditions is also being felt in Washington.  The Financial Solution will keep you posted on the changes in consumer credit practices and ways you can combat unfair fees.

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Tips on Budgeting

Keeping it Balanced

1. Set your financial goals.  Be specific and realistic when doing so.

2. Determine your monthly take home pay.  This includes all wages, pensions, subsidies and dependable child support.

3. Track your expenses so you'll know where your money is going.  Trim any expenses that seem too high.

4. Make a written spending plan.  Or click here for one you can print and make your own.

5. Live within your spending plan.  It shouldn't just look good, it should feel good.  Make adjustments as needed to make it comfortable for you.

6. Enroll in a free Money Principles For Today Workshop and learn how to make the most of your money.  

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Benefits of a Spending Plan

What are your financial goals; homeownership, college, travel, or retirement?  To achieve these goals takes time and planning. One of the best ways to get started is to organize your finances.

A fundamental tool of financial organization is the Spending Plan. Without a plan, spending decisions may be reactionary. A sound Spending Plan however can control your life’s direction and prevent making foolish choices with your money. You are also less likely to become a victim of identity theft because you are aware of your financial habits and credit history.

What is a Spending Plan?

Purpose of a Spending Plan

A Spending Plan helps you control your finances so your finances do not control you.

When constructing your Spending Plan, be realistic. You will probably be more successful when you cut back rather than cut expenses. Because the plan is a revisable document, it is important to review it monthly and make necessary changes.

 A well-designed spending plan considers all sources of income, living expenses, debt obligations and savings. It should include all three expense categories: fixed expenses (e.g., mortgage/rent, auto loans and insurance), variable expenses (e.g., groceries, entertainment, clothes and gasoline) and periodic expenses (e.g., property taxes, home repair, car maintenance and holidays).

Benefits of a Spending Plan

• Helps you set money aside to reach your savings goals

• It is important to treat yourself like any other bill and "Pay Yourself First":

• Arranging for a portion of your paycheck to be transferred to your savings account(s) makes it more difficult to spend the money.

• Helps you prepare for expenses

• Making a list of your regular expenses makes it easier to set enough money aside to pay your bills.

• Helps you prepare for unexpected expenses

• Although you cannot predict the exact amount that you will need to cover some expenses, such as repairing your car or replacing an appliance, you can set aside a portion of each paycheck to prepare for life's little emergencies.

• Helps you plan ahead

• A Spending Plan helps you track the progress you are making towards achieving your goal(s).

• Helps you control your spending habits

• Once you have written down all your household expenses, it is easier to see where you can cut back. One way is to ask yourself if you really "need" everything that you buy. Making the distinction between needs and wants can help you determine why you are spending your money. With thought, you can search for other ways to meet emotional needs.
   

Creating a Spending Plan

Certified Consumer Credit Counselors are experts in creating Spending Plans. Need an appointment? Send us an email to schedule a confidential appointment with one of our certified credit counselors: info@cccssa.org.

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Your Guide to Credit Reports

According to a recent study by the Consumer Federation of America, a consumer with an average credit score of 700 would reduce finance charges by $76 each year by increasing his score 30 points. Your credit report reflects the history of your borrowing and payment practices for a seven-to-ten-year period. A credit report contains information about your credit and loan history and is used extensively by potential lenders to evaluate your creditworthiness. When applying for a loan, lenders examine your credit history to assess the likelihood that you will repay the loan.

How you handle credit today will affect your access to credit later. Whether you’re opening a credit card, applying for a loan, purchasing a home or car, renting an apartment or signing up for utilities, providers will pull your credit report.

Know your rights.

Through the federal Fair Credit Reporting Act (FCRA) every consumer is entitled to a free copy of his or her credit report once every 12 months from each of the three major credit bureaus. Read each report carefully as there may be discrepancies between the three credit bureaus. This is because creditors do not necessarily report the information to all three and they don’t always share information.

Order your free credit report at www.annualcreditreport.com or call 877.322.8228.  You can also send a request by mail to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, Georgia 30348-5281.

If errors are found, contact the bureaus immediately so that they can begin to investigate and correct the mistake.

You may dispute the error in writing or online.  Print out the dispute form here.

Take Action to Improve Your Score

Building A Better Credit Portfolio is offered every 4th Saturday of the month for free! To attend a class or a personalized session regarding your credit report and credit score, make an appointment with a Certified Consumer Credit Counselor in your community by calling 1.800.410.2227 or click here to register online.

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These 7 signs indicate it's time to stop buying on credit:

1. Your borrowing to meet regular expenses, such as food and utility bills.

2. Your borrowing to buy items with a short time span, such as clothes or children's toys (the merchandise should outlast the payment period).

3. You are being dunned for late payment.

4. You have no cash reserves.

5. Your revolving charge accounts are never paid up.

6. You continually send creditors less than is actually due.

7. You feel the need to take out a debt consolidation loan.

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Your Card has been Declined...

"I have spent thousands of dollars with your company, and paid in full each month; however, three days ago, while checking my account online, I noticed that you have decreased my credit limit from $8,100 to a mere $400…”

Imagine this happening to you.  Perhaps it already has.  Before you can finish mentally linking the events that will take place after your credit company drastically reduces your credit limit, (this will push me over the limit and I will incur fees; my other creditors will hike my interest rate; this will affect my credit report!) your credit score has plummeted. 

“…this is unacceptable” continued the writer of the above letter as she goes on to list the main reasons for her complaint: “It was automatic, they failed to contact me in any way before or even after” and “they failed to look at my credit history with them and consider the possible circumstances”.  This consumer, who up until a few minutes before that letter held a bank dividend account, posted her experience on a popular online credit forum CardRatings.com.  More postings regarding other creditors appeared over the next few days echoing her experience: “This also happened to me.” 

While it’s typical of creditors to review card member accounts on a regular basis and make changes in interest rates and credit lines due to factors like payment history, out-of-pattern spending or credit report changes, Curtis Arnold, CEO of CardRatings.com says major creditors are “taking steps to protect themselves” in the midst of the subprime lending fallout by lowering credit limits of existing cardholders, “including some prime customers” (CNNMoney, Aug. 23, 2007).

1. Read Your Mail

2. Know the Rules

3. Keep Low Balances

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Identity Theft: Myths and Realities

One thousand one,
One thousand two,
One thousand three,
One thousand four...

Every four seconds another person's identity is used by someone else without their knowledge. It occurs in Texas more often than in 46 other states according to reports by the Federal Trade Commission.

So while you are reading this article, over 200 cases of IdentityTheft (IDT) will occur in the United States. These statistics include both ID Theft and ID Fraud. The difference is basically that theft involves using existing information or accounts while fraud involves opening new accounts or creating a fictitious person. Because stolen personal information can be sold again and again for use by another thief, IDT may happen more than once to thesame person.

IDT is probably the only crime that requires the victim to prove they are innocent and even clean up the mess caused by the thief. It’s not a bad idea to get professional help with this.

But, ideally you want to prevent yourself from becoming a victim. There are a number of steps we all can take – steps that are not expensive, but that require some diligence. Visit us online at www.identitytheftcounseling.org for 15 steps to help protect you from Identity Theft.

One of the best tools available to stop the unauthorized use of our credit history is a “Freeze”. Texas and many other states now allow anyone to place a “Freeze” on their credit report, a service that was previously limited to only IDT victims. A security freeze is effective because it requires the consumer to make an active consent before the Credit Reporting Agencies can release their information.

However, this “Freeze” also makes obtaining new credit more difficult for the consumer taking advantage of the service. A Personal Identification Number (PIN) is determined by the Credit Reporting agency and then must be used in all subsequent communication with the agency, or any time information is to be accessed or each time an application for credit is made.

Imagine you’re at the store to buy a new HDTV and they have a “no payment” for one year plan. Or, it’s year-end sale time at the car dealer, and you’re planning to use the 3% dealer incentive loan. It won’t happen if your credit can’t be checked. These are some considerations that you should ponder prior to taking this step, as it does last for seven years, and there will be a charge to unfreeze.

Another alternative is to place a “Fraud Alert” on your report. The “Alert” is effective for 90 days but can be renewed. The alert requests but does not require creditors call you before using the information so may not be as effective as the “Freeze.”

Another tool we have is access to a free credit report each year from each of the three Credit Reporting Agencies. To obtain your report go to www.annualcreditreport.com ; note: there are other sites claiming to be free, but they require a purchase of a monitoring service.

Another very effective protection is to be very, very stingy with your Social Security (SS) number. Before you provide it, ask why it is needed. Probably the veterinarian does not need this number to care for your pet, etc. If necessary, speak to a supervisor or manager to insist another identifier be used. Often when people ask for your SS number, they are planning to check your credit.

Thieves can use SS numbers to obtain employment, and then the IRS may dun you for the  income taxes due. Sometimes IDT thieves use a SS number to falsely claim a dependent on a tax return or to obtain government benefits. In some cases, a new virtual person can be created using a your Social Security number, with that person obtaining new credit card accounts, a new drivers license, renting an apartment or obtaining utilities. This is also where the credit freeze is effective.

If you or someone you know may be a victim, Consumer Credit Counseling Service of Greater San Antonio and Budget & Credit Solutions offer Identity Theft Counseling services to assist in the resolution process. Their counselors can help you deal with the numerous contacts, the letters and forms that can take hours and hours to research and complete. They can also provide information such as phone numbers and letter templates for the victim to complete on their own, or can assist in the process to reduce the amount of time spent on remediation. You will have peace of mind knowing that you’ve worked with a professional and covered all the bases.

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Pay Day Loans Simply Don’t Pay

A year-end study by the Center for Responsible Lending and other consumer advocacy groups showed that U.S consumers pay as much as $4.2 billion annually in steep fees charged by payday loans.

An article by Market Watch’s Andrea Coombes put it quite simply: “You don’t have to know much math to understand that taking out a loan for $325 and then having to repay $793 to clear the books is a losing proposition.”

But despite the clear math, some financially distressed consumers continually turn to payday loans. Two-thirds of them are taking 12 or more payday loans out a year (Personal Finance Daily Dec.1, 2006). Coombes says that since payday loans are designed to be paid back in two weeks, the lump sum required at the next payday is impossible for some borrowers. In most cases, consumers end up renewing the loan in order to have more time to pay but end up paying hundreds of dollars more on interest than what they originally borrowed.

Although the Personal Finance article advises against payday loans, the fact remains that even for those consumers that get caught up in the payday loan cycle, the terms of the agreement are crystal clear. The issue isn’t hidden fees or poor mathematical skills on the part of the consumer. It’s that often, consumers with less than perfect credit believe that they simply won’t qualify for other lenders. However, the director of consumer protection for the Consumer Federation of America, Jean Ann Fox, says that “only 6% of payday loan customers say they have no other alternative for getting credit”.

Consumers who are turning to payday loans and paying 400% interest may find that other less costly alternatives exist. Fox points to mainstream financial institutions like credit unions and banks to provide better financial alternatives. In addition, pay advances from employers or loans from family members are also avenues that financially distressed consumers may try. While taking these alternatives may be more complicated than taking a “quick and easy” payday loan by writing a check and walking out the door with cash, it may help save you from the cycle of debt.

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Light at End of Tunnel for
 Defaulted Student Loan Borrowers

Consumer Credit Counseling Service of Greater San Antonio now provides Student Loan Repayment Counseling.  This service provides a free initial counseling session in which a Certified Consumer Credit Counselor will provide an overview of the situation and point you in the right direction. For a one-time $70.00 fee, a Certified Consumer Credit Counselor will assist the client in sifting through information and resources that will help get the borrower back on track with repaying your student loan while learning to avoid predatory offers and dishonest marketing ploys. 

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Pay No Interest 'til.....2012......2015...

Look familiar? Enticing images of plasma TV's, leather couches or whole living room sets and shiny new vehicles with bright "NO INTEREST" signs can lure consumers into paying more in the long run.  Here's what our professionals have to say about "No Interest" sales:

“No interest doesn’t mean no payments”

Albert Guadiano, C.C.C.C.

“These types of promotions only work for the consumer IF he or she pays off the total purchase amount within the promotional period.  The consumer should divide the total purchase amount by the number of months the promotion runs and make payments that will pay the debt off in full before the promotional period expires.  That is 'no interest'."

“Factor in the transaction fee"

Valeria Wilson, Education Specialist, C.C.C.C.

“Most of these type offers have a transaction fee of 3+% of the amount charged or not less than $75.00. For example, when a person charges in February and the 0% interest is through August.  The charge IS accruing interest during this time.  IF the customer doesn’t pay the balance off by August 31^st, he now owes all the interest that accrued from February through August along with the amount he charged and the transaction fee."

“Stay Current”

Lucy Vasquez, C.C.C.C.

“ If the consumer misses a monthly payment, that may violate the sale terms and will end the promotion, then interest will begin to incur for the consumer.  All in all it could be a money saver if they stay current and pay it all before the deadline.”

George Merkle, President & CEO, CCCSSA

“If you are late on even one payment on some of these offers, often the interest rate goes to 18+% and immediately that whole balance becomes due.”

“Posting Problems"

Norma Kunze, C.C.C.C.

“If the final payment posts after the “cut-off time” (eg. Cutoff is 2 P.M. and payment posts at 3:00 P.M.) the accrued interest, from DAY ONE is usually added to the balance, this could be hundreds of dollars!”

“Ask Questions"

Rita Meza, C.C.C.C.

"If the consumer will be making payments, they need to ask what the terms will be if they miss a payment and if they don’t miss, will the interest be added at any specific time?"

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How to Read Your Credit Report

Ever wondered what is on your credit report? It contains important information that can impact your life as a consumer. Your credit report influences whether you are able to buy a home or get a job, so it is important to stay up-to-date.

Your credit report contains:

• Identity Information – Including Social Security Number, address and date of birth. This information is used to ensure the credit report information is accurate and matched with the right person.  It also can help detect and prevent identity fraud

• Employment history – Where you’ve worked and for how long.

• Credit history – account records with creditors.

• Inquiries- a list of potential lenders that have requested your credit report and when.

• Public financial records- including collections accounts, bankruptcies and late child support payments.

Your Credit Score

Most lenders use a mathematical formula to generate a “score” to help them determine if you are a good credit risk.  This is called a “credit score” and the most frequently used version is the FICO score created by Fair Isaac and Company.  A FICO score is a snapshot of your credit risk at a particular point in time.  FICO scores range between 300 and 850 with higher values being preferred because it indicates to lenders you are a lower risk. 

Your credit score is determined by five factors: payment history, outstanding debt, length of credit history, recent inquiries and types of credit in use. Each of these factors is weighted differently to determine your score:

• Payment history (35%) – Build up a consistent payment history.  Late payments, judgments, bankruptcy and tax liens can lower your score.

• Outstanding debt or Amounts Owed (30%) – Maxing out your credit cards can lower your score, so keep balances well under your credit limit.

• Length of credit history (15%) –Long relationships with banks or credit unions based on loans have a positive influence on your score.

• Recent inquiries or new credit (10%) – Too many inquiries for credit within a short period of time can lower your score because it suggests you are frantic for credit and/or may soon be overexposed.

• Types of credit in use- (10%)- Too many open lines of credit (i.e. credit cards, retail accounts, installment loans, mortgage accounts) can lower your score. Loans from finance companies generally lower your score, especially when there are no other types of credit reported.
   

The interest rates you are charged on loans may be determined by your FICO score. Most often, the higher your score the better chance you have of getting a lower rate. FICO scores also can be used to determine your homeowner and auto insurance premiums and whether or not you qualify for a loan.

More information on How to Build a Better Credit Portfolio.  

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Your Credit Capacity

• The 20 % figure is based on an "average" family with "average" expenses.  It does not take into account any major emergencies.

Consumer Credit Laws

Click here for "Secrets of Bill Collectors"' in PDF format

Click here for "Fair Debt Collection Practices Act in PDF format

Truth In Lending Act - requires creditor to provide the consumer with accurate and complete credit costs and terms.

Equal Credit Opportunity Act (ECOA) - Prohibits a creditor from discriminating against a consumer on the basis of age, sex, or marital status, reliance on income from a public assistance program, and race, color, religion, or national origin.

Fair Credit Reporting Act (FCRA) - The purpose of this act is to insure that information contained in a credit report is accurate and that it will be used in a confidential manner. Consumers have a right to dispute information that may be derogatory or erroneous. Inaccurate information must be corrected or deleted, and a consumer explanation statement of 100 words or less can also be included in the report. A credit bureau must also delete adverse information which is more than seven years old and information on bankruptcy which is more than ten years old.  

The Fair and Accurate Credit Transactions Act (FACTA) - The FACT Act was signed into law at the end of 2003.  This Act amends the Fair Credit Reporting Act and gives every consumer the right to a free credit report every year from each of the three major credit bureaus: Equifax, Experian and TransUnion.  To get your free credit report, go to www.annualcreditreport.com or call 877-322-8228.

The Fair Credit Billing Act (FCBA) and Electronic Fund Transfer Act (EFTA) - These Acts can help consumers resolve mistakes on credit billing and electronic transfer account statements.  The Acts outline procedures for correcting several types of errors including unauthorized charges and the failure to properly reflect payments.

Fair Debt Collection Pratices Act (FDCPA) - A third party collector is prohibited from:

• Using abusive language to coerce a consumer into making payment,
• Calling at unreasonable hours (before 8:00 AM and after 9:00 PM) or making excessive calls
• Threatening to notify the employer or friends that the consumer has not paid his/her bills
• Using false pretenses to gain entry to the home with the intent to identify or take something of value
• Attempting to collect more than what is owed
• Sending the consumer misleading letters that may appear to be from a government agency or a court of law

Click here for more details of the Fair Debt Collection Practices Act in PDF format.

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How Much House Can You Afford?

A lender or real estate broker is primarily concerned just with your ability to make that mortgage payment, but YOU must look at the "bigger picture" and carefully consider all  your other expenses.  Be sure to include your periodic expenses such as clothing, car repairs, medical expenses, school supplies and gifts.  Money needs to be set aside monthly for these expenses too.  

Also, try to anticipate any changed in your future expenses.  Do you foresee purchasing a new car?  Will your insurance payments increase? Are more children in your future? Are your children planning to attend college? These circumstances may have a bearing on whether or not you can afford the mortgage payment in the future.  Do not commit to payments so large that your home becomes a financial burden instead of a joy.

Compare your current expenses and proposed future expenses to these national averages:

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