The phone rings, I pick it up.
“This is Justin.”
The voice on the other end usually makes some small talk explaining their situation, or has questions about a property, but it usually cumulates into the statement as to why they are calling…
“I want to buy a house.”
“I can help you with that.”, I reply. “Can I ask you a few questions first?”
At this point, people usually expect me to ask about what they are looking for, how many bedrooms do they need, how many bathrooms, what city or neighborhood do you want to live in, etc…
Everyone wants to jump right to the Golden Ring first and talk about the wants, wishes, and desires they have in a home.
They want to dream about that beautiful backyard that they want to come home to at the end of the day and relax in, or envision Christmas mornings with family, opening presents around the Christmas Tree.
They are tired of renting, tired of ‘throwing their money away on rent’, ready to start a family, ready to have a place to call ‘Home’, whatever the reason may be.
But that is not how this conversation is going to go.
You don’t get to the top of Everest, without putting in the work and laying the foundation first.
“What is your household’s gross annual income per year?”
“What is your current rent payment?”
“How much savings do you have?”
“What is your current outstanding debt?”
“Do you have any outstanding judgments or collections?”
“Do you have any recent bankruptcies or foreclosures?”
“What is your current credit score?”
“How long have you been at your current job?”
“Do you have a 401k or 403b you are able to borrow from, if necessary?”
“Have you spoken with, or are currently working with, a lender?”
They key to homeownership is not just having a solid income, or figuring that because you pay ‘X’-amount on rent each month, that you can afford a mortgage.
The true key to homeownership is having a solid financial foundation in place so that you can successfully own a home, and all of the care and maintenance that goes with it.
I recently had a client that, based on their income, could afford a $500,000 home.
Unfortunately, they had 3 cars that were less than 5 years old, all with loans on them; and substantial credit card debt due to living a lavish lifestyle.
They were paying more on rent than a mortgage on a $500k home would be, and making all of their other monthly obligations, but because of their debt-to-income ratio and lack of available credit, they could not qualify for a mortgage.
They felt they were destined to rent forever.
I referred them to a Mortgage Broker I know and trust, and together we came up with a plan to lay the financial foundation they needed to achieve their dream of owning a home.
This past month, we Closed on a beautiful ‘new build’ that they helped design with their Builder. From the plot of land the home sits on, to every detail and finish in the home, they helped choose and design it.
A year ago, they never dreamed this was possible.
Now they get to enjoy their first Christmas, and build future memories, in their ‘forever’ home.
This did not happen overnight though. In fact, it took about a year to get their debt and credit cleaned up to the point that we could get them into their dream home.
Unfortunately, for every success story, there are countless other examples of people that reach out to me for help in achieving homeownership, but are not willing to make the sacrifices needed to achieve it.
These are the people that break my heart because I know that if they can stop focusing on the short term sacrifices they have to make, and instead focus on the long term result and enjoyment they want, they could easily achieve that dream of homeownership they desire.
Achieving your goals or dreams, regardless if it is to buy a home or lose 20 pounds, is the result of playing the long game, making sacrifices, and putting in the work vs focusing on short term results.
Just like building your dream home, to win at the long game, it all starts with laying the proper foundation first.
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