If The Loan Officer Doesn’t Ask You This Question – Run!

There is one question that will tell first time home buyers whether the loan officer has their interests in mind or not. I often start first time home buyer workshops by offering a five-dollar bill to the seminar participant who can guess what that question is. This all-important question is simply the following: What is the maximum total housing payment that you can comfortably afford? 

A loan officer with the buyers’ interests in mind won’t recommend to first time home buyers to borrow more money than they can safely or comfortably afford. There usually is a big difference between how much can be borrowed and the maximum that should be borrowed. There are many loan programs available today that will allow first time home buyers to borrow way more than they should. Loan officers can nearly always qualify first time home buyers for more than they can afford. It almost goes without saying that a loan officer will invariably qualify first time home buyers for more than they can safely afford – unless the loan officer asks what that maximum comfortable monthly payment is. How else would a loan officer know this except by asking? 

As a general rule, first time home buyers can normally afford a new total housing payment that is approximately 50% more than the current monthly rent. This total housing payment should include the mortgage payment, monthly property taxes, fire insurance (if buying a house) or HOA fees (if buying a condo). 50% more housing expenses may seem like a lot but is reduced significantly by the tax write-off that is immediately available to new homebuyers. First-time home owners can increase their after-tax take-home pay right away by reducing their withholding to account for the home owner deduction of mortgage interest and property taxes. The first time home buyer can typically increase monthly after-tax take-home pay by between $200 and $400 immediately after purchase. That goes a long way in reducing the overall housing expense for the first time home buyer in San Diego County. 

Home ownership should be a step up into a better life. Affordability of monthly payments is a crucial part of the first time home buyer's overall enjoyment of life. Loan officers with their clients’ interests at heart will not try to shoehorn first time home buyers into the maximum loans that they can qualify for. The amount that the first time home buyer can borrow should be determined not by how much they can qualify for but by how much they can safely pay per month. The loan officer will only know this by asking the first time home buyer. The one question that the first time home buyer must hear from the loan officer early-on is the following: “What is the maximum total housing payment that you can comfortably afford?”

Site Map  Home Page  The Major First-Time Homebuyer Financial Assistance Programs   ACORN   Chula Vista Program  San Diego AMI Chart   City Heights Home In The Heights Program   City Heights Redevelopment District   City Heights PITCH Program    Vista Program  CalSTRS  CalHFA Extra Credit Teacher Program   Teacher Credential List   Escondido HOME Program  Santee Program   Escondido HELP Program  El Cajon California Dream Program   El Cajon American Dream Program  Downtown San Diego Program   Entire City of San Diego Program   San Diego County Program   CalHFA CHDAP Program     CalHFA HiCAP Program  CalHFA HIRAP Program  Redevelopment Census Tracts  Mortgage Credit Certificate - MCC  CalHFA 1st Mortgages   VA Loans   Community Housing Works CASH Program    Safe Conventional Loans  Unsafe Conventional Loans  Quick Qualifying Charrt   $0 Down Payment with CalHFA Financing  $10,000 Down Payment with CalHFA Financing   $20,000 Down Payment with CalHFA Financing   $30,000 Down Payment with CalHFA Financing   $40,000 Down Payment with CalHFA Financing   $50,000 Down Payment with CalHFA Financing   $60,000 Down Payment with CalHFA Financing   $70,000 Down Payment with CalHFA Financing   $80,000 Down Payment with CalHFA Financing   $90.000 Down Payment with CalHFA Financing   $100,000 Down Payment with CalHFA Financing  Tax Advantages of Home Ownership  Renter 1040    Renter 540   Homeowner 1040    Homeowner Schedule A  Homeowner 540   IRS Publication 530  CTEC License  Apply Online   Ask Me Anything   Free Reports  6 Ways You Know You Are Ready To Buy  50 Fun Things To Do In San Diego   7 Reasons To Own Your Own Home   Financial Security Is The Biggest Reason To Own Your Own Home   Top 10 Reasons To Buy  It's a Great Time To Buy    My Promise To You   HUD-Approved Classes   Map of San Diego County    Credit Issues   A Summary of Credit   Do's and Don'ts During Homebuying Process    What-If Credit Simulator    What-If Credit Simulator - Paying Off 3 Credit Cards   What-If Credit Simulator - Allocating $5,500 Toward All Debts   Rapid Rescore   8 Ways To Improve Your Credit Score  Disputing Items On Credit Report   Common Misconceptions That First-Time Buyers Often Have   Top 10 Reasons To Buy Your First Home   Zig Ziglar Sales Poem - The Bride White of Hair   8 Ways of Getting Your Finances In Order   Recommended Books   Home Buying Process   People In The Home Buying Process   Points of Negotiation In The Home Buying Process   Guarantee of Closing Costs What Your Home Inspector Should Cover  Home Preferences Checklist   Tips For Finding The Perfect Neighborhood  Meet Your Team   Contact Information Beware the Option ARM Criminals  Getting The Most From The First Time Home Buyer Finance Specialist   Stacking First Time Home buyer Financial Assistance Programs Together The Misadventures of Using LendingTree.com  APR Is A Poor Way To Compare Closing Costs   Disposing of Real Property   The Home Mortgage Interest Deduction   Ten Things To Do To Get Ready For a New Home Purchase  Documentation That The First Time Home Buyer Will Need   How To Protect Yourself During The Mortgage Process   Make Sure That You Can Handle The Worst-Case Scenario   Incentives That Condo Converters Force Upon Buyers  The Loan Officer's Most Important Question   The Two Things That Prevent 57 Percent of First Time Home Buyer Purchases  The Short Sale  Allied Gardens   City Heights  Clairemont  College_Area  Coronado    Downtown  Encannto   Golden Hill   Hillcrest  Kensington   La Jolla   Linda Vista   Logan Heights  Mira Mesa  Pacific Beach  Mission Valley  Morena  North Park  Ocean Beach  Paradise Hills Point Loma  San Carlos Scripps Ranch  Serra Mesa   Sorrento Valley  Tierrasanta  University City  Alpine  Campo  El Cajon  Jacumba  Jamul  La Mesa   Lakeside  Lemon Grove  Pine Valley   Rancho San Diego   Santee   Spring Valley Bonsall  Borrego Springs   Escondido     Fallbrook   Julian   Penasquitos   Poway   Ramona   Rancho Bernardo   Rancho Santa Fe   San Marcos   Valley Center  Vista  Cardiff   Carlsbad   Carmel Valley  Del Mar   Encinitas  Oceanside   Solana Beach   Bonita   Chula Vista   Imperial Beach   National City   Nestor    San Ysidro