Unfortunately there are many home buyers out there which do not have a realistic picture of how much they could actually afford to spend on a house. First time home buyers often make this mistake and end up wasting time and energy looking at houses they can not afford. Not only do buyers get their hopes up but the hopes of the vendor. There’s nothing worse than finding a home that you love and going to the bank for a house loan only to learn that the bank won’t give you the selling price of the house. Because, according to them, you can not afford it.
When obtaining pre-qualified for a home loan it’s important to not forget that, typically, the amount of the loan in addition to the taxes and insurance shouldn’t exceed 28 percent of their household’s total income. Additionally, the household’s total debt obligations shouldn’t exceed 36 percent of revenue.
By preventing delusions and getting pre-qualified for a house loan, realtors can help home buyers in the house buying process eliminate houses early on so the purchaser does not waste time looking at houses they can not afford in the first location.
By knowing what you can afford to spend on a house eliminates the frustration a purchaser may feel when they stumble across the perfect home just to learn later through the mortgage process that they can not get financing for that sum. It’s hard to reduce your criteria after this happens. You’ve already made up in your mind the sort of home you would like to buy.
No home will be perfect. Make a list of attributes you need to have in a house and set realistic expectations for what you can afford. Stay away from making decisions purely based on instinct and emotion. Finding the ideal home you can afford may take some time. Be patient, you’ll discover the home you’re searching for.