Have you ever heard the expression “Practice makes perfect”? Start a healthy habit, practice setting aside money that would represent your monthly house payment. This habit will help to make sure you can afford your future house payment. If you have the ability to set aside the amount that you plan to pay for a mortgage payment you will not only show that you have the income and discipline to be able to repay a loan but you will also have accumulated funds to assist in the down payment and other expenses of buying a new home.
Pre-approval amount does not mean a loan payment you can afford. When you obtain a pre-approval, a lender has reviewed your application, credit report, outstanding debts, and savings. They do not take into account the lifestyle that you choose to lead. Your monthly expenses that are not reflected on your credit report or listed as debts have not been factored in. It is your responsibility to sit down and take a good look at what you can truly commit to making as a monthly mortgage payment before you decide on a home.
Your loan officer and real estate agent are not a tax professionals and it is recommended to meet with one before you sign. While many loan officers have the experience and knowledge to guide you through the process of purchasing a home most are not equipped to give you tax advice. They may know the tax incentives that are out there for purchasing a home but not how they directly will apply to you and your financial situation. This is especially important if you are purchasing additional properties to rent or resale. The good news is that your loan officer or real estate agent can recommend you to an excellent tax professional in your area.