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How much home can I afford

Posted on April 6, 2017 by Deana Manzanares.

When you are thinking about purchasing a home typically the first question you ask yourself is “how much home can I afford?”.  This is a great question to get you started but quite honestly, I think there is a more important question you need to be asking yourself.  “What are your expectations in the vision of home ownership?”  Meaning, when you envision yourself in owning your own place, what does it look like?  I may be losing you right now, but trust me, I’m going somewhere with this, stay with me.

For example, when I bought my first house, I had high expectations of what my house would look like.  I envisioned a beautiful front yard with flowers, maybe trees and a big backyard, enough space for a dog and swingset for my kids.  The inside of my house looked like a pottery barn magazine.  Nothing wrong with all of this, a very optimistic vision.

My husband and I were both full-time employees, great work history, decent income but we had no money saved.  We had no down payment.  I know this was not the smartest way to start off, but we were told there were programs where we didn’t need any funds for down payment.  My cousin was our mortgage lender and another cousin was our realtor. We trusted them because they were family.  We didn’t question their experience. Don’t get me wrong, I’m not saying you can’t work with family.  It is just wise to also do your research, no matter who you are choosing to work with. This was all well before I was in the mortgage business, so I really didn’t know what to do or where to start. Today, I would approach this much differently.

We started to feel discouraged when we first went out looking for homes.  Our pre-approval amount where homes that were not aligning with my vision.  Plus,  I was particular to the area I wanted to purchase in.  Finally, our realtor asked if we wanted to see some new builds that were coming up in an area much further east, but were in our price range.  We agreed to go look….and what would you expect to happen? You guessed it, I fell in love.  I walked into my pottery barn home and I had to have it.

The commute to work and our daughter’s school was at least 3-45 minutes, but that didn’t matter anymore.  It didn’t matter because the house was worth the sacrifice.  We purchased anyway, it was a dream come true.

The only landscaping included was for the front yard. We got the big backyard but it was all dirt.  We also had these beautiful large windows in the great room and up the stairs. Now you remember me saying we had no money saved.  We came from a two bedroom apartment, so we had limited “hand me down” furniture as well as some that we previously purchased, on a budget.  There was a definite need for some additional furnishings for the new home that we did not take into account. Well, that unfurnished newly built home was not going to look like pages from the pottery barn catalog with no money.

We quickly realized we would just need to slowly purchase items we needed when we could.  Little did we know, it was going to take a lot of time to get where we wanted to be.

If I could do it all over, would I still buy the same house?  Maybe.  BUT, I would have taken more time to really consider and look at all my options. I would not have purchased with no money in the bank.  I got swept away, my “vision” overtook my reality.

What is your vision versus your reality?  Asking how much home can you afford needs to come with what are your true expectations.  Can you alter your vision?  Do you have time to wait for the perfect envisionment or do you have limited time?  You need to examine your perspective and knowing what is truly important qualities in purchasing a home. In hindsight for example, for us, having a big back yard was not a necessity but location should have been.  I lost my perspective and focused on my vision.

Working with an honest and trustworthy lender to get pre-approved is the best place to start.  Then teaming with an experienced Realtor, will put yourself in a great position when looking for a home.

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