Straight Talk About Real Estate

Now that you’ve determined that you really want to own your own home, let’s look at your finances.

The first question to ask is NOT “How much money do you have?” I ask first, “What is the maximum amount you feel comfortable paying each month for your housing payment?”

I had a client who was paying $1200 a month in rent, and was not saving any money at the end of the month. Does that mean he can only afford $1200 a month for a housing payment?

No. He knew he was spending more than he needed to for “stuff” and eating out. With proper discipline, he can put another $1000 towards his housing payment. Making a housing payment first will force him to cut out unnecessary spending.

A $1200 monthly payment and a $2400 monthly payment makes a big difference in what kind of house you can buy. I guarantee you that the house that cost you $2400 a month is a much nicer house than the one that cost you $1200 a month. If you want to enjoy a nicer house, are you willing to make some sacrifices? Where can you cut your spending in order to buy a nicer house? As I said in the previous post, you must have a strong motivation to own a home. You must be motivated enough to make some sacrifices.

Take a look at your spending habits. Figure out realistically what is the maximum amount you feel comfortable paying each month for your housing payment.

But this won’t get your qualified for a loan. What’s the missing step? How do you prepare your credit? Read on to find out!

Want to jump quickly to the other Buying posts? Here’s an index to help you out.

#1: Getting ready to buy
#2: Looking at finances
#3: Checking your credit
#4: Qualifying for a loan
#5: Determining the price to shop for
#6: Finding the location
#7: Proximity to your workplace
#8: Choosing your agent
#9: Cautions in the search
#10: Moving into your new home