This question has been boggling people’s minds for ages, and we still don’t have an answer.  All too often in real estate we see people wrestling with the same question in a different way.  What comes first?  The mortgage or the home?  What is the SMART choice?

A lot of people get it backwards.  They shop for a home and THEN try to make the financing work.  They act on the emotion of buying their dream home and THEN apply logic in how to pay for it.  A lot of people even use the online “mortgage calculators” and adjust the numbers to make it work, but they are ignoring some important factors that could greatly impact their future.    

While mortgage lenders “crunch the numbers,” they neglect to ask what we would consider to be a SMART question:  “What do you value?”  For example:

  • How large is your family?  What are you monthly food and clothing costs (a question most lenders neglect to ask on the application).

  • Does your state require State Income Tax or not?  This could also significantly alter what you can or cannot afford.

  • How much do you spend on entertainment, eating out or vacationing?  Will a larger or a nicer house be satisfactory when you are no longer able to make those yearly visits to the beach or enjoy those weekly meals at your favorite restaraunt?

  • Who do you give your money to?  Very rarely do mortgage lenders factor in your charitable giving.  If you believe in those causes and those organizations, will you still be able to maintain your giving with this house purchase?  

You may have found the home of your dreams, but does it fit the lifestyle you want to maintain?  If not, the grass will not be greener on the other side.

So, what is the SMART choice?  Set your emotions aside, take the logical route and look at your financing first.  Consult with a lender before you ever attend an open house or ever turn on your computer and visit a real estate site.  Your lender will give you a snapshot of what you can afford.  Once you’ve received this “snapshot,” you can then discern how that amount fits into your lifestyle.

We still don’t know which came first--the chicken or the egg?  But, we do know that when it comes to buying a home, the mortgage comes first!  We have some great lenders that we would be glad to recommend to you.  Additionally, we’d love to meet with you and discuss your priorities in the home buying process.  Give us a call today!

Committed to helping you Buy. Sell. Live. SMART,

Seth & Alyce