Too often, buyers find themselves struggling financially right after closing. They find their dream home, go under contract, and close. But then they quickly realize that fitting this new mortgage payment into their budget will be quite a feat.
What happened, and what went wrong?
I can answer that question. And the answer is:
There’s a big difference between what you qualify for on paper and what you can genuinely afford.
Your loan officer and the underwriter will review your income and debts before you begin shopping for a home. In that review, your monthly obligations will be calculated by adding together:
  1. Monthly payments listed on your credit report
  2. Monthly payments for child support and alimony
  3. Monthly payment, including taxes, insurance, and HOA fees for the home you’re buying
The total will help establish the maximum monthly payment you’re approved for.
We always say just because you can, doesn’t mean you should!
Just because the underwriter says your maximum monthly payment can be $2500 doesn’t mean you should buy a house with that payment. Here’s why:
These are not your only monthly payments, are they?
Post-closing financial problems occur when emotions get in the way, and you temporarily forget about your OTHER monthly debts…, the ones your loan officer and underwriter don’t know about. These monthly payments are things such as:
  1. Car insurance
  2. Health insurance
  3. Medication costs
  4. Medical insurance
  5. Tuition payments
  6. School expenses for younger children
  7. Groceries, which can be a huge number if you have children
These expenses could be quite a bit per month when all totaled up, and they will continue after you close on your home loan. When you add these expenses to your mortgage payment, you may find that the total puts you well outside your comfort zone.
When buying a home, it’s imperative to consider ALL aspects of your financial picture before moving forward. Just stop and pause for a moment and analyze your total budget logically. If you do that before your emotions get involved, it’ll ensure that you’ll not only get your dream home but also get to keep it!

If you have questions about any part of the mortgage process, feel free to contact us.

If you’re just starting the process, we’re standing by to help you down the path to homeownership!
Use the Apply Now button to submit your application!