Q: My current house just isn’t doing it for my family. We’re looking for a house to purchase that is near good schools and in a good neighborhood, but it’s taking longer than hoped. I’m a little worried that interest rates are going to go back up before I get a chance to buy. What should I do?
A: We don’t get much practice in thinking about the cost of homes throughout our day-to-day lives. You probably know how much you could reasonably spend on a night out or a spontaneous vacation. Some quick back-of-napkin type of calculations can give you a reasonable budget for most everyday expenses. But when it comes to home prices, they aren’t in the same category. Visualize $200,000. Now visualize $450,000. Chances are good your visualization didn’t change very much.
These differences are conceivable when they get down to the monthly payment. A $200,000 mortgage might mean a $950 monthly payment. The $450,000 mortgage, on the other hand, would mean nearly $2,000 in monthly payments. That’s a difference you can visualize!
Getting help with making those numbers real is just one of the many reasons your first step in the home-buying process should be mortgage pre-qualification. Before you start looking for houses, contact an agent or pack a single box, you should sit down with a mortgage consultant or loan officer for this often overlooked step.
A mortgage specialist like Amy Jackson with Family Savings Credit Union can help you identify a price range that is reasonable for your lifestyle and even help set a budget for your home purchase. Plus, pre-qualifying for a home loan will give you additional leverage with the buyer since they know you’re serious about purchasing. Mortgage experts are also excellent resources for trustworthy agents and brokers who can provide referrals to get you through the door.
At some point, you’re going to need to get approved for a mortgage. There’s no reason to wait until after you’ve picked out your dream home. If you wait, you may be setting yourself up for heartbreak and regret if you fall in love with a home you can’t afford. Or you may find yourself settling for less house than you want because you didn’t have a budget in mind. To avoid both these nightmares, speak with a mortgage professional at Family Savings Credit Union or apply at familysavingscu.com today!