Recent conversations with First Time Buyers have revealed a refreshing attitude amongst today’s home buyers: affordability. People don’t want to get in over their heads with a mortgage payment they can’t afford. I really like that. I have advocated exactly that concept with my clients for my entire career: buy a home you can afford.
During The Boom my words of advice in this regard fell on deaf ears. I would do then as I do now: calculate the mortgage payment and ask the client if this number fits the family budget. In other words, “Can you afford this?” Too often the answer would be “Yes” when I truly knew it should be a “No.” I tried to tell these folks to buy a cheaper house, buy a home they could afford so as not to lead to trouble down the line. I walked away from many of those situations because I just couldn’t reconcile the math and I wouldn’t be a party to a future financial disaster. I knew full well, as I left the room, that another mortgage “professional” would sit down with those clients and tell them what they wanted to hear, give them a truly bad mortgage, collect his commission check, and march off into the sunset leaving this family with a ticking time bomb.
I sat last night with a young couple shopping for a 2 family home. They make an excellent income and have excellent credit. They’re working with not a whole lot of cash (for New York) and so we’ve qualified them for an FHA Insured mortgage loan. They had an expression, “Use a blanket that’s big enough.” In other words, buy a home you can afford. It’s truly all about the monthly payment. If you can’t reconcile that number with your family’s budget, you’re either not ready to buy, or you should look for a less expensive home.
Even though this couple could afford a pretty hefty mortgage payment based on their income, they insist on shopping for a house that allows for a mortgage payment that leaves “breathing room” in their budget. This is good, sober thinking.
When you buy a home, you’re reaching for the stars to make the dream of homeownership come true. But reaching for the stars doesn’t mean you have to launch yourself into orbit. You can make that dream come true with an affordable mortgage payment if you are honest with yourself and realize that you really need to a “blanket that’s big enough.”
Makes sense to me, a blanket that’s big enough keeps you warm at night.
I welcome Comments for all my blog entries. I will be happy to review and approve all legitimate comments provided by readers of tcurranmortgage.com. I do not permit unfettered access to comments for obvious reasons: mortgage spammers and their ilk. If you wish to Comment on any entry, please do so and I will quickly review and approve. Thanks for reading tcurranmortgage.com. Hope that helps!