Should I Buy The Most Expensive House I Qualify For?

The first step in the home buying process is speaking with a reputable lender. Once your financials are in order the lender will issue a pre-approval letter. This document will spell out up to what amount the buyer can purchase. The key element here is the phrase "up to".

Many first time buyers will want to START their search at this "up-to" amount. After all, if you are approved for "up-to" 150,000 dollars why look at a 145,000 dollar house? Let's examine why staying under your limit is a good idea...

1) Your car is older than two states-- The bank looks at your current debt/income ratio. If you do not currently have an auto loan this amount is not factored in. What happens in three months when you need a new car?

2) You take vacations like a rap star-- If any part of your vacation includes boarding a Lear jet, it might be a good idea not to be house poor. Once you have stayed at the Hilton, the Motel 6 just won't do.

3) There is a minivan in your future-- When the first kid arrived my wife was mad that the nice daycare was 150 dollars. I chuckled and told her not to be cheap, 150 dollars a month was not bad. Then she told me it was 150 a week. Kids make you broke and crazy. I have four...

4) The only tool you can operate is a clarinet-- Home repairs can cost serious money. And things have a habit of breaking at the worst possible time. Bet you regret not taking shop classes in high school now!

5) Your emergency fund would not buy breakfast for two at Denny's-- In this economy two income families sometime become one income families with little notice. Having a house note the size of the Goodyear blimp is not a wise thing to do.

Find a home that you are comfortable in. Both in a physical and financial sense! Need help finding such a property? Call Doug Rogers with Bayou Properties Realty today (318) 613-1994.