Dear Sue,
I inherited some money when my grandmother passed away last year.
I didn’t want to trickle it away so I decided to invest it my first house.
My father encouraged the idea by saying that buying a home was like a forced savings account.
I contacted our family Realtor who put me in touch with a mortgage broker. I really liked him. I was surprised when he told me how much I qualified for.
I never thought that I would be able to qualify for a $250,000 home. It’s kind of scary.
My Realtor told me that I didn’t have to buy a home for as much as I qualified for. She said that I could find a nice home for less money.
I was thankful and told her that I was looking for a new car and I could really use the extra cash.
She freaked out and told me not to buy a car while I was in the process of buying a house.
Is that any of her business? Why would she care?
~ First Timer Frank
Dear Frank,
Your family picked the right Realtor. It sounds like she is really looking out for you.
Many homebuyers complain that their Realtors push them to buy beyond their comfort zone and sometimes beyond their means.
Yours is doing just the opposite. She appears to have your best interest in mind. No one wants to be a slave to a home.
One’s home should be a sanctuary, not a liability. Your Realtor sounds like someone I would listen to.
She is wise to advise you not to buy a car while you’re in the process of buying a home. I always tell my buyers that if they go out and buy a car they had better like it because they may have to live in it.
Seriously, the underwriter looks for debt ratios when qualifying a borrower for a home loan.
Your debt-to-income ratio changes significantly as your debt is increased. The lender can turn your loan down if they determine that your debt is too high.
The lender will check your credit report before funding the loan just to make sure that you haven’t added any debt.
I would suggest that you get used to paying a mortgage that includes taxes, insurance and maintenance and other unexpected expenses before adding a car payment or other debt to your monthly financial obligations.
It’s a matter of good Home $$$s and Sense.
Sue Thompson is owner and sales manager of HomeTown Realtors in Auburn. She can be reached at seesue@seehometown.com, or on the web at homedollarsandsense.com.
