“In What Price Range can we Afford a Home?”

“In What Price Range can we Afford a Home?”

 

 

 

I never like answering this question. The question I want to answer is, what mortgage payment are you comfortable with? So often I speak to someone who tells me that they have been approved for X dollars, but they have no idea what a payment would be. This particular person is wise enough to know what they don’t know:

 

We are exploring our options and have been looking at houses in our surrounding area but have no idea what we qualify for. With that being said, I am asking you to give me and idea for what I can shop for.

 

It is unfortunate that so many folks don’t get the answer to the question of what monthly payment they are comfortable with. This is an exercise I take each client through and even when we have gotten that answer, we still are not 100% sure of the number, monthly property taxes, homeowners insurance or mortgage insurance ( if applicable).

 

I always have the clients contact me once they are getting ready to make an offer so that we can do a better job estimating all the numbers. At that point they have a very good idea what the mortgage payment will be.

 

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Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com

www.righttracfg.com

www.joepetrowsky.com

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Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

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Comment balloon 29 commentsJoe Petrowsky • December 30 2015 06:03AM

Comments

Good morning Joe.  My monthly payments went up 100.00 a month because of taxes.  We've been in this home for a little over a year and my wife has hinted to start looking for another one.  2016 is going to get interesting.

Posted by James Dray, Exceptional Agents, Outstanding Results (Fathom Realty AR LLC) over 1 year ago

This is excellent advice, Joe.  Especially down here where we have a number of gated communities with some fairly hefty HOA fees.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) over 1 year ago

Good morning, Joe Petrowsky ... one's comfort zone is sometimes not within that range of qualification.... it depends on lifestyle!!!

Posted by Barbara Todaro, "Franklin MA Homes" (RE/MAX Executive Realty ) over 1 year ago

Good morning Joe. Big difference between what your income says you can afford and what you really can afford! Good counseling makes a difference. Enjoy your day!

Posted by Wayne Martin, Real Estate Broker (Wayne M Martin) over 1 year ago

Always important to know what someone is comfortable paying each month. It's the same when people finance furniture.  They may be approved for a much bigger amount but when they see what the monthly payment will be, they don't spend quite as much.

Posted by Roger D. Mucci, Lets shake things up at your home today! (Shaken...with a Twist 216.633.2092) over 1 year ago

Joe, you do an excellent job in counseling your clients.

Posted by Rebecca Gaujot, Lewisburg WV, the go to agent for all real estate (RE/MAX Vision Quest) over 1 year ago

Have to look at the BIG picture....have yet to see anyone spend ALL they are quulified to spend...nor should they...comfort especially for first time buyers who don't realize what impact a deduction has...is paramount to being a happy homeowner.

Posted by Sally K. & David L. Hanson, WI Realtors - Luxury - Divorce - Short Sale (Keller Williams 414-525-0563) over 1 year ago

I agree with you. I always tell my clients that the lender may say they qualify for an amount that may be more than the amount they will be comfortable paying. They should be able to save for a rainy day or for vacations and fun things.

Posted by Gita Bantwal, REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel (RE/MAX Centre Realtors) over 1 year ago

Good Morning Joe:

This is question will always be a part of my buyer counseling session. I will get buyers who are already preapproved for xx amount but they don't have any clue as to what their mortgage payment would be.

 

If their current rent is $1300 and they would like to stay within this range up to max of additional $200 inclusive of everything, they can't be looking at houses above $200K. It is simple math and logic for an FHA loan.

 

I shake my head when the loan officers don't ask the question you ask them. 

Posted by Maria Gilda Racelis, Home Ownership is w/in Reach. We Make it Happen! (Home Buyers Realty, LLC-Manchester, Bolton. Vernon,Ellington) over 1 year ago

I wish more Mortgage Lenders operated like you Joe, consumers need to know what they can afford in monthly payments and not go by what they can qualify for.

Posted by Bob Ratliff, "Sold with Bob" (Renowned Realty ) over 1 year ago

Good morning Joe. Your focus matters as most folks only know what they comfortably handle monthly.

Posted by Sheila Anderson, The Real Estate Whisperer Who Listens 732-715-1133 (Referral Group Incorporated) over 1 year ago

Joe, great point - what they can "afford" and what they "qualify for" is usually different. 

Posted by Joan Cox, Denver Real Estate - Selling One Home at a Time (Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373) over 1 year ago

Good morning Joe.  If there is one arena that is completely aware of this concept it, in my opinion, be car dealerships.  Top of the morning Joe.  Mark

Posted by Mark Don McInnes, Sandpoint, North Idaho Real Estate - 208-255.6227 over 1 year ago

When I send a buyerto get qualified I tell them not only to asks for costs but to tell the lender how much they would ideally be able to afford a month. 

Posted by Vera Gonzalez, Gonzo For Real Estate (RE/MAX Suburban, Inc.) over 1 year ago

Joe Petrowsky This has always been the case. People buy the monthly paymant, not the purchase price.

Bill Roberts

Posted by Bill Roberts, "Baby Boomer" Retirement Planner (Brooks and Dunphy Real Estate) over 1 year ago

Joe,

As usual this is very sound advice on your part.  A

Posted by Ron and Alexandra Seigel, Luxury Real Estate Branding and Marketing (Napa Consultants) over 1 year ago

Many home buyers do need advice on the process. I like your approach.

 I hope you are fully enjoying the holiday weekend.

Today, Dolores and I went into Washington, DC to Hillwood Estate, Museum and Gardens to see their special exhibit Ingenue to Icon, 70 years of fashion, and also toured the mansion.

Posted by Roy Kelley, Roy and Dolores Kelley Photographs (Realty Group Referrals) over 1 year ago

Joe I agree, and when I am asked the same question I respond the same way as you.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) over 1 year ago

Hi Joe,

Happy New Year.  This is the benefit of having a great mortgage rep to help buyers. 

Posted by Wayne and Jean Marie Zuhl, The Last Names You'll Ever Need in Real Estate (Hallmark Realtors) over 1 year ago

Joe

You have the expertise to ask your customers the right questions . . . . to guild them through a successful mortgage process.

Good luck and success.

Lou Ludwig

Posted by Lou Ludwig, Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC (Ludwig & Associates) over 1 year ago

That is rough Joe, I would answer their questions with a bunch of other questions.

Posted by Noah Seidenberg, Chicagoland and Suburbs (800) 858-7917 (Coldwell Banker) over 1 year ago

I have a mortgage app that my Lender gave me so I will do that as well before we write the offer.  We don't want any melt downs on the way to the closing table.

Posted by Evelyn Johnston, The People You Know, Like and Trust! (Friends & Neighbors Real Estate) over 1 year ago

You are so right.  Just because someone can qualify for more, doesn't mean they should spend that much!

Posted by Belinda Spillman, Colorado Living! (Aspen Lane Real Estate Colorful Colorado) over 1 year ago

Great post, Joe. The buyers need to be well informed. I work with a lot of buyers that strive to keep their monthly payments low even though they can afford more. I think that is very wise on their part. 

Posted by Debbie Laity, Your Real Estate Resource for Delta County, CO (Cedaredge Land Company) over 1 year ago

Joe, great post and naturally the right way to look at the process of home buying and how to determine whether a house is right for you.  Can you afford it? Simple question.  Talk about cart before the horse!

Posted by Joanna Cohlan, Designing, Decorating & Staging Westchester Homes (Fresh Eyes For Your Home) over 1 year ago

Hi Joe -- wonderfully stated --- comfort level is very important.   

Posted by Michael Jacobs, Los Angeles Pasadena Area Real Estate 818.516.4393 (Coldwell Banker Residential Brokerage) over 1 year ago

Great advice Joe.  There should be much more to consider than just what you have been told you qualify for.

Posted by Sharon Tara, New Hampshire Home Stager (Sharon Tara Transformations) over 1 year ago

It's the unknowns with finances that can kill you! Go in with eyes wide open. So glad that your clients find you--you're the best!

Posted by Gayle Rich-Boxman Fishhawk Lake Real Estate, "Your Gateway to the Lake" 503-755-2905 (John L Scott Market Center) over 1 year ago

You sound like me Joe Petrowsky .   Clients not satisfied with other lenders tell me they were approved for $ xxx but have no idea what their monthly obligation would be or their total outlay including taxes and insurance.

I break it down for them when I do a preapproval and make sure not only the wallet but the stomach can handle it.

Posted by DEANNA EARLY - ( NMLS #268590 ), Virginia Mortgage Loan Originator (American National Bank and Trust) over 1 year ago

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