Don't Get In Too Deep

After working in the real estate industry for six years, I have found that there are a lot of people out there who think that they MUST get the most expensive home that they can afford.  This can lead to a lot of problems, not the least of which is financial ruin.

WAIT???   A real estate agent is saying that people buying MORE EXPENSIVE homes is a PROBLEM???

Yes I do, but let me explain.  Throughout my experience, I have run into countless people who get qualified for a loan, and they feel that they NEED to look for homes that are at the top of their price range.  There is almost a desire to get the absolute best that they can.  The problem is, most people QUALIFY for a lot more than they can REALISTICALLY afford. 

For example, when I bought my house in 2001, I qualified for around a $180,000 loan.  The most I could realistically afford, though, was $140,000, after taking into account ALL of the expenses I had each month, and the insurance, taxes, etc. that get tacked onto the payment.

With the foreclosure rates at all time highs in many parts of the country, and mortgage companies throwing in the towel each day, you can bet that there are MANY people who now wish they would have bought a cheaper home. 

This all being said, the "moral" of my post is this:  Please PLEASE be careful with your budgeting when thinking of purchasing a new home.  Whether you can afford payments of $600 a month, or $6,000 a month, just make sure to buy a home that you will be COMFORTABLE with financially.  If you worry about making your house payment each night when you go to bed, I can guarantee that you won't be relaxed or happy in your new home.  I think it is PARAMOUNT for real estate agents to guide their clients through this concept, because overextending can really cause a lot of problems down the road.

Until later,

Bill