We are ready to Purchase our first Home. We have a Question.

Question: We are in our mid 20’s and have been married for a few months. We are ready to purchase a home. Someone advised us that we should purchase a home for near the maximum amount of our preapproval which is $325,000.  What do you suggest?

Answer:  You did not mention who gave you that advice, but we do not know of any reputable Real estate or Mortgage professional who would tell you that! When considering a home purchase, your Family budget must take first priority. Although your home is very important, there is more to life than a home. How about being able to purchase the right things for your family?  How about having a little cash extra to enjoy life? How about the necessity of having savings for an emergency or to reward yourself once in a while for all your hard work?  Money problems are very stressful.

You were approved for that amount based on your income and debts. Sounds like you are in a pretty good financial position. Why mess that up? Remember that there is a fine line between need and desire.

You need to sit down with your spouse and make a family budget. Decide which home mortgage payment fits that budget. Get advice from your parents and a financial adviser. Don’t take advice from anyone unless they are qualified to make those financial  suggestions. Ask your lender what price home fits that monthly payment. Then look at homes in that price range. Keep in mind that a house payment includes homeowners insurance, a tax bill, utilities and possible mortgage insurance.  If you do not like the homes you see in that price range, then do what your parents and grandparents did…...Save more money!