Just because you qualify for a certain amount, doesn’t mean that it’s necessarily a great idea.
Yes, it is more difficult to obtain a mortgage now than it has been in the past especially after foreclosure. And rightfully so considering that the underwriting guidelines of yesteryear paved the way for a housing meltdown so epic that a mortgage website called “AfterForeclosure.com” now makes sense. However, even if you qualify for a 500k loan in today’s reinvigorated atmosphere, doesn’t mean that it makes sense for your situation. Pre-approvals are cookie-cutter tools that take into account nothing more your average paycheck and hypothetical housing expenses. It’s up to borrowers to decide how much house makes sense for them.
When going over his plan to fix the nation’s housing market, President Obama stated, “We’ve got to build a housing system that is durable and fair and rewards responsibility for generations to come.” That means being responsible for yourself and not allowing a loan officer to determine what monthly payment you’re able to afford. After all, they’re never going to ask about your childcare expenses, ever-rising U-Verse bill or addiction to sushi. They don’t account for little luxuries like your Netflix, Hulu Plus or Spotify subscriptions. They don’t inquire about your ability to pay for both the mortgage AND diapers, organic food and that bi-monthly night out you promised your spouse. What we’re getting at here is that only YOU can determine what monthly payment makes sense for your lifestyle. We’ve talked to many borrowers who regret purchasing at the peak of the market because it was a “great time to buy” (sound familiar?) and they qualified – thinking “what could go wrong?!” as long as the bank deemed them worthy. After all, finance is a bank’s business. They wouldn’t make a losing bet, right?
Obama also said, “In the run-up to the crisis, banks and governments too often made everybody feel like they had to own a home, even if they weren’t ready and didn’t have the payments. That’s a mistake we should not repeat.”
Agreed. While homeownership is an amazing thing that we clearly believe very strongly in – it’s not for everyone. Don’t let mounting pressure from your in-laws or the media determine your lifestyle. If you’re not ready, that’s okay. But if you are, or at least would like to explore your options, give us a call! We’re happy to go over realistic, potential payments as a great starting point for your “pros and cons” list. We strongly believe homeownership is important to most people who want to set down roots and build equity as well as prepare for future retirement. Homeownership is within reach even After Foreclosure or short sale.