The most natural first step to buying a new home is to start shopping. Unfortunately, this route most often leads to disappointment and discouragement. Let’s face it. We usually want more than we can afford.
Here’s a typical scenario:
Frank and Frannie Homebuyer decide they want to buy a house. Immediately, they start shopping. Soon enough they fall in love with the house of their dreams. Unfortunately, when they go to the bank to set up their financing, they discover it is a financial impossibility for them. This leads to great discouragement as both Frank and Frannie have their hearts set on this home. When they begin to search for homes they can get financed for, they are left disappointed because none of the homes in this new price range can add up to the financially impossible dream home in which they have already mentally moved into. Two things can happen at this point. Frank and Frannie may be so emotionally exhausted (from the high excitement in the beginning, the mental move in to the dream home, and then the crash to the bottom when they came face-to-face with financial reality) that they just quit looking. In other words, if they can’t have the dream home – then they want nothing at all. If Frank and Frannie own a home already, it may not be so bad to delay this big financial commitment. However, if Frank and Frannie resort to renting, they are making a bad emotional decision versus a solid business investment decision. Throwing money away monthly in rent when ownership is possible, is most often a bad use of hard-earned income. Invest. Invest. Invest. Make your money work for you – not drain you.
The second possible reaction of Frank and Frannie is to pull out all the stops so they can make their dream come true. This involves asking Mom and Dad to co-sign, borrowing money from a friend to make the down payment, etc. So Frank and Frannie buy the dream home – only they are not free to enjoy it. The dream becomes a nightmare as they struggle to make their monthly payments. It results in forced overtime work, no spending flexibility, and ultimately stress and pressure in “the dream home.” When Baby Homebuyer comes along, or a medical emergency arises, or an unexpected lay-off, the pressures increase and in the end the dream belongs to the bank and The Homebuyers are left homeless.
How could this problem be completely eliminated?
- Step #1: Go to the lender of your choice and see how much they can approve you for.
- Step #2: Look at your finances and determine how much you can afford.
- Step#3: Now start shopping as a wise homebuyer in the proper price range.
With these simple steps, you have put yourself on the path to a wise financial investment and emotional prosperity. A new home in Sparta is now an option for you to enjoy for a long, long time. Welcome home.