within the purview of the typical buyer’s assets.
Be careful here. Some banks are willing to lend larger loans than they know are reasonable, creating financial issues for buyers down the road. Even if you know your budget, and you know what’s affordable for you, you could get “tricked” by a bank or lender into thinking you can afford more than you can. Know your limits. Stay disciplined so you stay on track. Let’s say you’re counting on selling your home for xx amount of dollars to serve as your down payment for your dream home that’s a bit out of your financial reach, and you don’t have extra in your savings account. What are you going to do if your home doesn’t sell for the amount you expected — or worse, if your home doesn’t sell at all, languishing on the market while you’re forced to pay two mortgages and can’t make ends meet? You have to be smart about this. While the process of buying a home, whether or not it’s your first, is a major emotional financial investment, you must maintain emotional control and make practical decisions based on your budget and situation. The best approach? Pre-approval by a proven, experienced, qualified, and reputable mortgage lender with whom you have worked closely and carefully to determine the appropriate budget for a mortgage loan.
Step 3: Create a List of Needs vs. Wants
We described the concept of determining your needs vs. your wants in great detail and at great length in Chapter 4, but nonetheless, this topic is the third step in the overall home- buying process and bears repeating here.
Essentially, you need to determine what is most important to
79
Powered by FlippingBook