You Qualify to Buy the House, But Can you Afford It?
Here in Central Connecticut we are still in a buyer's market. This adds additional value for buyers, as there are homes that are within the upper reaches of their buying power that would be beyond them in a sellers market. This adds a temptation for them that needs to be rationally considered before jumping into a contract.
Having a lender's pre-qualification letter in hand gives them an indication as to how much credit they have available for their home purchase. Even before they put that offer on the house they want to buy, their agent should review the purchase price with taxes considered as well as any other issues or concerns the agent may have on the house.
Paying a mortgage is somewhat similar to paying rent, only so far as the monthly outlay from their budget. The mortgage payment includes escrow for taxes and insurance usually as well. If a buyer buys within the value of their abilities or less, thee should always be sufficient left over from their budget to cover typical home owners 'Oh No's.
The 'Oh No's, to a homeowner are the sounds of leaks, breaks of just no sounds that come from just the life span of appliances expiring or just breaks due to unfamiliarity with use or accidents. Many of these can put a burden on a budget and while people need to eat and have heat, they also need to make that mortgage payment on time.
Even beyond that are the issue that can arise when making a purchase that starts as a real bargain, but gets to show it's reality after making the purchase.
With this I am speaking primarily of a buyer that I have been showing homes. This buyer was single and earning a good income so values were not going to be an issue. What presented itself, especially in our state as a buyers market, was an offer too tempting. A foreclosure came on the market, and it had been on and off for a while. It's current value was for sale at $260,000 which was well within his buying range. In looking at the details of the home, and it's assessed value for the town where it was occupied, in good condition, the home would have a market value closer to $460,000. In addition, it needed work even before the buyer would be able to occupy to an estimated value of $30,000.
Neither of these would be a problem, provided the income stayed as it was, part of which was income from overtime. If something were to happen to the buyer such as illness, the extra money would not be there as insurance does not pay based on overtime.
The cost of maintaining that home would fall beyond his means, and issues would present itself that were completely unexpected and could be avoided if all were thought through before making that offer. As these were discussed, he recognized that it was beyond his ability to afford the home, even though he was qualified to buy the home.
In our market here in Connecticut there are many homes that are available that are potentially the type of home that can hurt a family if not bought properly and the entire cost of ownership is considered.
Buyers in Connecticut need to work reliable lender as well as an agent that will work with them to get them into a home that is a proper fit for their family as well as their wallet.
If you are looking to buy a home in Central Connecticut call me 203-206-0754 or send me an email. I would be happy to assist you or to discuss you Connecticut home purchase.
You Qualify to Buy the House, But Can you Afford It?
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