Like many clients I work with ‘Barbara’ wanted more than anything to be a homeowner. She had taken the time to save up a down payment and like many home shoppers, had started window shopping online in her spare time.
When I first spoke with her, she had a pre-approval from a large bank stating what price home she could buy. The question posed to me was what interest rate she could get and what the closing costs would be for the type of home she was shopping for. Important information that I was happy to provide.
I had one question for her: How much are you comfortable paying each month for a mortgage? I ask every home buyer this question before providing a pre-approval for a few reasons.
1. Your Budget is important! Home ownership comes with many expenses that renters aren’t accustomed to. Water bills, trash bills, higher energy bills. Recognizing these costs before buying will keep your budget in line and avoid any potential of being ‘house poor.’
2. Online Calculators don’t give you the full information. Many leave out Mortgage Insurance (required in most cases if you have less than a 20% down payment) as well as not estimating property taxes or homeowners insurance. This can lead to searching for a home that is really out of your comfort range.
3. Once we know this number, we can tailor the home search and mortgage process to meet your individual needs. This process is fluid and based in communication between you and your mortgage professional.
Barbara spent the greater part of year finding the house that fit her budget and her needs, we traded emails back and forth any time she had a question or wanted to know the exact payment of a property near the top of her budget and once we closed on her new home, the smile on her face was worth $3 Million Dollars. Our hard work and cooperation paid off by getting her a home that not only gave her everything she wanted but would keep her from worrying about making a payment each month!
I live to hear “I love my house!”