Spring is almost here!! After months of being shut inside, people begin to come out of hibernation, and start looking at houses. You can often see their hopeful faces circling around the neighborhoods they desire. Where do you start? Most people start their search on-line these days.(Might I suggest carolinapropertysales.com.) Here is the thing--how do you know how much you can afford?
Unless you have bad credit or a bankruptcy lenders would like to keep it under 33% of your monthly pre-tax income. I always send people to get pre-qualified first. When we do identify a house to make an offer, the sellers are going to want to be sure they are dealing with qualified buyers.
I tell clients to think in terms of a payment they are comfortable with. Are you sure you want to change your lifestyle for a higher payment? For some reason many of them start talking about cutting out Starbucks. Venti, half-whole milk, one quarter 1%, one quarter non-fat, extra hot, split quad shots (1 1/2 shots decaf, 2 1/2 shots regular), no foam latte, with whip, 2 packets of splenda, 1 sugar in the raw, a touch of vanilla syrup and 3 short sprinkles of cinnamon OR a new house?!
Just because you can afford a mortgage, doesn't mean you should. Always try to keep money in reserve to cover a rainy day. What are your plans for children? Would your parents come live with you? Sometimes older kids boomerang. Has retirement savings entered the thought process yet?
In the end, the whole thing is a process. There are professionals to help you. Real estate agents can help in finding the right mortgage person and attorney. Your team will be very important in one of the biggest decisions you will ever make. No pressure!!
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