Do you want to become a statistic?
Do you want to lose your first home to foreclosure?
If you answered both of these questions “no”; then you should read this post.
In the last year I have discovered that the home buyers I am talking to are very concerned about becoming a statistic, a negative and sad statistic at that. The statistic is a home owner who loses their home to foreclosure or short sale in the future. No one wants this to happen to them as we have all seen and heard their stories. In fact, you may know someone who has gone through this “living hell”.
Millions of Americans have been taken advantage of by their mortgage professional who put them into a home and mortgage they really can’t afford. True?
So, how do you protect yourself? Here are two things you can do to protect yourself. First, decide on a budget for your mortgage payment. What can you realistically afford? If you currently pay $1,000 a month in rent and you can save $500 a month after paying your taxes and contributing to your retirement account, then you should be able to afford at least a $1,500 mortgage payment and maybe more because of the tax benefits. You also might have to re-prioritize your spending and your goals to be able to buy a home. So, please do your homework.
Second, only work with a mortgage professional who asks you the following question when you first talk with them—“what is your monthly budget for your house payment?” Why is this important? First, this question tells me that they have your interests in mind. Second, most mortgage professionals who don’t ask this question will tell you that you can really afford whatever payment they can get you pre-approved for. A larger commissions check for them is riding on this.
Be aware that even if with underwriting standards being more conservative we often can get you approved for more mortgage than you can really afford. For example, your budget may tell you that you can afford a mortgage payment of $1,800 a month; but I might be able to get you pre-approved for a payment of $2,600 a month. Just because I can get you approved for a payment this high, does not mean you can afford it. Remember you are the one who will be making the payment, not your mortgage professional.
This is why I ask all my clients “what is your monthly budget for your house payment?” Make sure whoever your mortgage professional is that they ask you this question too. If they don’t, run away from them and find another mortgage professional.
Do you want to lose your first home to foreclosure?
If you answered both of these questions “no”; then you should read this post.
In the last year I have discovered that the home buyers I am talking to are very concerned about becoming a statistic, a negative and sad statistic at that. The statistic is a home owner who loses their home to foreclosure or short sale in the future. No one wants this to happen to them as we have all seen and heard their stories. In fact, you may know someone who has gone through this “living hell”.
Millions of Americans have been taken advantage of by their mortgage professional who put them into a home and mortgage they really can’t afford. True?
So, how do you protect yourself? Here are two things you can do to protect yourself. First, decide on a budget for your mortgage payment. What can you realistically afford? If you currently pay $1,000 a month in rent and you can save $500 a month after paying your taxes and contributing to your retirement account, then you should be able to afford at least a $1,500 mortgage payment and maybe more because of the tax benefits. You also might have to re-prioritize your spending and your goals to be able to buy a home. So, please do your homework.
Second, only work with a mortgage professional who asks you the following question when you first talk with them—“what is your monthly budget for your house payment?” Why is this important? First, this question tells me that they have your interests in mind. Second, most mortgage professionals who don’t ask this question will tell you that you can really afford whatever payment they can get you pre-approved for. A larger commissions check for them is riding on this.
Be aware that even if with underwriting standards being more conservative we often can get you approved for more mortgage than you can really afford. For example, your budget may tell you that you can afford a mortgage payment of $1,800 a month; but I might be able to get you pre-approved for a payment of $2,600 a month. Just because I can get you approved for a payment this high, does not mean you can afford it. Remember you are the one who will be making the payment, not your mortgage professional.
This is why I ask all my clients “what is your monthly budget for your house payment?” Make sure whoever your mortgage professional is that they ask you this question too. If they don’t, run away from them and find another mortgage professional.
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