I want to take a moment to discuss a trend that I see too often. More and more I see mortgage applications from prospective buyer's that do not have enough cash reserves. In some cases people have none! While you can still be approved for a loan with little reserves, I feel it is a recipe for disaster. This is the same for someone that depletes their life savings for a down payment on a house. Not a wise decision! Don't get me wrong. There are always exceptions to the rule. Maybe you know you will be getting a promotion or large raise. Maybe you will receive a gift or inheritance. With these things, you can easily build or replenish your savings account. Unfortunately not everyone is so lucky! Home ownership is great, but it does come with added responsibility. Your landlord will no longer fix that leak or replace the furnace. These are on you now and can be very expensive! This is where cash reserves come into play. Mortgage lenders only want to verify 2 months worth of mortgage payments, but you should be focused on saving much more. Not only can something happen maintenance wise on your home, what if you lose your job? You definitely will need an emergency fund for that!
I think you get my point. Life is full of surprises and emergencies. Just don't let them get the best of you where you could run the risk of losing your new home!
By no means do I want to scare you away from purchasing a home. It is a great time to buy right now! Just before you jump into it, do a little bit of planning and make an effort to put some money away for a rainy day!
Trust me you will be happy you did!
Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"
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