When speaking with potential Home Purchasing borrowers one of the first things I always ask after gathering some basic financial info is "What do YOU feel you can comfortably afford for a monthly housing payment?".

Because it matters not what I can qualify you for, it only matters what you can afford. This question also serves to tell me if the borrower has realistic expectations from the start.

You see, If I can qualify someone for a $1800 per month house payment but they feel they can only handle a $1400 per month payment, it will allow me to better assist them by ringing out the numbers and to advising them as to the Price Range that they should not exceed. I say price range because several other factors will effect the TOTAL payment. (i.e. Condo Fees, HOA Fees, Ground Rent, Taxes, and Insurance etc...)

This assists their Real Estate Agent as well, because there is no point in showing someone a home that they could never comfortably afford. Thereby saving time, emotion and fuel for everyone involved.

Now the other reason for this question regarding expectations is as follows. All to often I speak with clients that when asked" What can you afford." they give me an answer that on some occasions is clearly out of the realm of their financial capabilities. I've been told, "I don't want to go over $1500 per month." when in reality they will not be able to qualify for anything close to that number. I then have to educate them regarding debt to income ratios and enlighten them about a budget plus the additional cost of home ownership. When finished we go over what the max is that I am able to qualify them for, but none the less, THEY still must be comfortable with the monthly payment. Which in this scenario, usually is a problem because it is less than they initially anticipated.

The moral to this story is simple, You can only afford, what you can afford. Typically everybody has the ability to stretch themselves a little bit when purchasing something they really want. But in most circumstances you are looking at a LIFETIME financial decision and would serve yourself well to really evaluate ALL of your finances to make sure that 18 months down the road you are not regretting your previous financial decision.

You want to enjoy your new home, not worry about losing it every month.

I would encourage anybody interested in seeking financing to first sit down and thoroughly fill out a Financial Statement / Budget, so you can better decide as to what it is that you really can afford.

If anyone needs a budget form to fill out just email me and I will be more that happy to send it to you.