With the $8,000 tax credit looming upon us, and the hopes of a backyard for our two pups, hubby and I have been on a quest to purchase a home before April 31st. We began our search almost two months ago and used those "mortgage calculators" you see on just about every real estate website. We determined our price range, signed with a real estate agent and hit the road.
It was probably house #40 that we fell in love with - and put an offer in.... with no pre-approval letter in hand. Mistake #1. The homeowners countered, so we budged and offered just a bit more. Mistake #2. In the "we almost just bought our first place pandemonium," my husband decided to go meet with a mortgage broker and get out pre-approval letter. WHY no one told us that this should be STEP #1 is beyond me, but that pre-approval letter was eye-opening. Now don't get me wrong, we're both professionals, both make a decent living and have virtually no debt... so the actual "getting approved" part was cake. BUT who wants to spend upwards of $3,000 a month on a mortgage?!? So reality has slowly started to set in, and we now have a more realistic grasp of what we'd like to spend on our first place.
For all of you first time homebuyers out there - this is my only advice to you. BEFORE you do the fun stuff like hitting the streets in the quest for your perfect place, drudge on over to your nearest (and most qualified) mortgage broker and get an accurate idea of what you can spend on a house (factoring in taxes, mortgage insurance, homeowners insurance, homeowner monthly fees, etc). In the long run it will save you lots of energy and it probably could've prevented the ulcer I slowly feel developing!
Happy House Hunting!!