We looked at a very interesting house after church today…
A 5 bedroom, 3.5 bath house with a view of a lake!
The bank listed it a little over one month ago but has already dropped their asking price by 12%. We offered 12% below than that.
This house hunt has shown me how easy it is to be sucked into buying more house than one can afford.
I have written several posts making light of the numerous houses that I have looked at thus far. However, why is that? Because it is very difficult to find a house within my proposed budget. It would be VERY easy to pick out a VERY nice house if I was willing to pay 40+% more. After all, we make enough to qualify.
However, I asked my lender to qualify me on just my salary. Why? Because my wife will likely earn no income while she is attending nursing school in 2011-2012. While she is earning no money, I will still have to pay for that house.
And then, I asked him to limit my pre-qualification below that level. Why?
What if something happens to my income? You don’t think it couldn’t happen? No one ever does.
What if gas goes to $5.00 gallon? With health care now passed, how much will my taxes go up in the next two years? If our government passes the “Cap & Trade” bill, what will happen to my energy costs? Each of these three events will have the same effect as a pay cut.
I work in the aerospace industry. The Boeing machinists just authorized a strike in June. My hiring at the company I now work for was delayed by three months because of a Boeing strike. What will happen this time?
I don’t know. So, I am being very conservative. I am looking at houses that I will be able to afford even if the sky falls. And most of those aren’t all that nice. Either the house or the neighborhood or both are less than desirable.
And so, the search goes on…and I keep swimming upstream against the current.
