COVINGTON CORNER MORTGAGE BLOG
*This post is written by our Preferred Lender*
I wanted to address some of the most common questions we get when starting a Homebuyer Client relationship. I’ll be addressing a new question each week in this Blog Post. I hope you find this information helpful.
HOW MUCH HOME CAN WE AFFORD?
This is the most common question I get from new Buyers as well as move-up Buyers.
How much home can you afford? There are so many variables here and so much information to share with a client. This usually invites me to ask if I can get a few questions answered:
- How much do you have to put down?
- How is your credit?
- How much do you make?
- What is your timeline to purchase?
- And most important: How much do you want your monthly payment to be at the maximum? Because, after all, it doesn’t matter if you can afford a $6000 a month house payment if you wouldn’t dream of paying more than $3500 a month.
What I find is that where a client will land is somewhere between where they “want” the payment to be and where it needs to be in order to get the home and area they want to purchase in. It’s important to be realistic and to educate the client about where their dream payment will put them (perhaps in a condo in a small town in eastern Washington) – and, what they need to be prepared to pay to get the home they need in the area they would desire to live.
Most clients don’t realize how complicated this question is. A good Mortgage Banker will ask questions, listen carefully, ask more questions and then, with the input from the client – decide what the best range of purchase should be for them to feel good and have a reasonable expectation of being able to attain an approval. This helps everyone, including the realtor, work with the right expectations when offering on potential home purchases.
Of course, there are folks who are going to be stretching to get the home they want in their area. This is either due to down payment funds available, income or debt load that eats up buying power. Their first home will likely NOT be their dream home, but, just the first step into homeownership that will allow them to build equity and eventually move on to the home that is closer to their dream. No one gets anywhere without taking that first step. My job then is to explore creative ways to help them stretch their dollars – perhaps a gift from family to have a bit larger down payment? Utilizing a first-time homebuyer program (FTHB) to lower their rate and mortgage insurance costs. Do they have a 401K? Perhaps they can take a loan from that to reach better buying power.
Again, this all takes detailed conversations upfront to be sure that everyone understands the parameters of an approval and that the clients are comfortable with their choices. This is why I highly encourage my partners and clients to get in for a conversation with me as early as possible. This gives us all time to absorb the info that is being shared and to make the best decision all the way around.
Take a look at our mortgage calculators here!
Shelley Ann Covington | NMLS ID# 102076
Branch Manager/Mortgage Consultant
Penrith home Loans LLC
11411 NE 124th Street, Suite 110 | Kirkland, WA 98034
Fax 425.823.8425 | Cell 206.255.5814
shelley.covington@penrithloans.com| https://www.penrithloans.com/consultants/shelley-covington
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