The Surprising Rule My Husband and I Set for Ourselves Before Buying a House

Could this rule help save you from financial disaster?

Many years ago, my husband and I bought a house. Before we did, we made a simple rule about our mortgage loan that we vowed we wouldn't break no matter what. When we moved forward with the purchase, and for all subsequent houses we've bought, we made sure to follow the same rule.

Here's what it is, and why we made the commitment to stick to this guideline before becoming homeowners.

This was our rule for becoming homeowners

The rule that my husband and I made was that we would not purchase any home that required us to take out a mortgage we couldn't afford independently on our own salaries. In other words, our loan had to be for an amount that my husband could afford if I stopped working, or for an amount that I could afford if my husband gave up his job.

This did not mean that we were willing to spend either my entire income or his entire income on our home loan. Most experts recommend you spend less than 28% of your income on housing costs, including principal, interest, taxes, and insurance. So, we made sure our monthly mortgage payment did not exceed 28% of either his income or my income.

This meant we purchased a home that was much smaller and less expensive than the amount we could technically afford. But, as our income increased and as our property went up in value, giving us more money for a down payment, we've been able to move up to bigger houses that are a better fit for our family while still sticking within this limit.

Here's why we felt following this rule was so important

My husband and I made this rule for a few reasons, even though we knew that it would limit the type of home we could to afford.

One of the biggest reasons is that we know life is uncertain. Although we both have our own businesses and thus are not likely to stop earning income entirely, we also know that incomes can go down due to unforeseen events. We also didn't know if one of us would want to stop working in the future once we had kids.

Since we didn't want to face foreclosure if something unexpected did happen and one of us had to stop working, we wanted to be sure that our house was affordable with just one income. Setting the rule allowed us to make that happen.

By making sure we kept our housing costs to 28% of one of our incomes, we also ensured we wouldn't end up house poor. We have plenty of money left over to do things like travel and save for retirement and other financial goals because we didn't overcommit to a large housing payment.

We have never regretted making the choice to follow this rule, which also gave us peace of mind as well as financial flexibility. And if we buy another house in the future, we'll be sure to follow it again too.