A recent survey by BMO Harris Bank revealed that most people who go into the home buying process (61 percent) have a budget in place for their purchase. They know how much house they want and what it will cost them. But within that group, one-third of them would go over that budget if they found a house they truly wanted. First time home buyers are less likely to start with a budget they will stick to and are more likely to go over budget when they do find a house they want.
This isn’t necessarily a bad thing. First time home buyers are more often than not at the beginning of their earnings arc, meaning that over time they can expect to see their yearly incomes increase as they progress through their chosen careers. What seems like a high payment today may become much easier to manage over a few years’ time.
As a Real Estate agent I can’t really advise you about what might be right for your individual financial situation. But what I can do is make sure you have all the information you need to make it for yourself. And I will relate one story that tends to help bring some common sense to the subject.
Several years ago I had a landlord client I called on regularly. One day when I visited her there was a brand new Lexus sitting in her parking spot. I went inside and congratulated her on her beautiful new car. Her response was surprising.
“Yes, it is pretty. And it costs me over $600 a month in payments.”
Which meant every time she got into her new luxury car she wasn’t enjoying the ride. She was thinking about the expense.
Houses can be the same way. You might be able to reach a bit higher than you planned but if you’re going to be constantly worrying about the monthly payment, maybe you’re overreaching. A home should be a castle, not a prison.
To start the process you should talk to a lender and get an idea of what your current income and debt load will allow you to afford. A good lender agent will also show you how you can rearrange your finances to help you comfortably accommodate home ownership. I have access to those kinds of people.
If you’re ready to start the process give me a call at 918-809-5199 and we’ll get started today!
What would you do? Would you go over budget if you found the right house? Leave a comment below.