Buying A Home – The Most Important Step

David Zwierecki asked: Contrary to popular belief, getting a pre-approval is not the first and most important step in the homebuying process. When buying a home, especially if you are a first time homebuyer, there are many items that you need to pay particular attention to. However, there is one step that is of the utmost importance and is usually neglected by most homebuyers. Rarely, will a consumer ever buy anything that is more expensive than a home, therefore, special attention should be given to every aspect of the homebuying process. The most important step in the homebuying process is preparing a monthly budget. Preparing a budget with your spouse before you even begin looking at homes or trying to see how much of a home you will qualify for should be done before anything else is even considered. Proper budgeting will allow you to figure out how much YOU and YOUR SPOUSE can comfortably afford each month for your mortgage payment. Everything needs to be considered in your monthly budget: mortgage, taxes, insurance, utilities, investments, other monthly debts, car payments, vacations, holiday spending, etc… The reason as to why this is so important is simple. First off, when you get pre-approved for a mortgage loan, the lender does not take into consideration many personal aspects and factors to your finances. For example if you and your family like to take family vacations every year, if you like to run your air conditioning all year, if you like to invest 25% of your income into savings, retirement and investment accounts, if you have any health issues in your family that cost a considerable amount of money, and many other factors are not taken into consideration by a lender when they are pre-approving you for a mortgage. The lender does not make your mortgage payment, you do. Just because you get approved for a certain amount does not mean you need to buy a home that is that much. Buy a home based on how much you want to spend, not on how much you are pre-approved for. Buying a home should not mean having to change your lifestyle and the way you prefer to live life. Way too many people end up buying too much home, with too high of a mortgage payment and they end up living paycheck to paycheck, stressed out, and in financial distress. Don’t let this happen to you. Buying a home is an important and big part of a person’s life and should be treated just as importantly. Therefore, buy a home that is within your monthly means. Do not get caught up in stretching yourself too thin and living paycheck to paycheck. Anything can happen in life, loss of a job, serious illness, declining real estate market, significantly increased interest rates, etc… Stay in control of your finances, and budget your finances from the beginning to limit any potential future problems from ruining your finances and causing a lot of heartache and added stress. Investing in Real Estate?

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