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 X 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 — like me — with whom you work closely and carefully to determine the appropriate budget for a mortgage loan.
STEP 3: CREATE A LIST OF NEEDS VS. WANTS
Essentially, you need to determine what is most important to you in a home — the non-negotiables — vs. what you’d like to have in a home — things you might need to let go of. In other words,
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