Take a hard look at what you can afford
Q: You recently suggested approaching lenders for financial analysis. I agree lenders/bankers do provide information. However, I would enter a caveat there.
They are in the business of making loans and are going to tell you the maximum you could possibly borrow/spend. That’s not necessarily what you really can afford or need to spend.
You need to ask yourself whether you want to have extra cash at the end of the month to maybe plant some trees, paint a room, visit a restaurant or go on vacation. Having purchased homes in Texas, Pennsylvania and New York, I can say that once the bankers see you can afford a certain amount, the Realtors and bankers push you to spend that much. But if you want to be financially sound, spend less than you can afford. I have found it to be a very good lesson learned. — S. J.
A: I agree with your advice to spend less than the maximum you may be offered. There’s nothing wrong, though, with finding out how much you could qualify to borrow. That’s what bankers will tell you, and they should.
The real estate brokers I know are much more interested in putting together a trouble-free deal than in squeezing people for their last dime. Years ago, when I had a real estate license, I was delighted with people who didn’t want to spend more just because they could. Knowing they would easily qualify for a loan made house hunting a particularly pleasant experience.
My guess is that most agents would say the same thing. And I suspect lenders also find it relaxing to deal with well-qualified — overqualified — buyers.
There’s nothing wrong, though, with finding out how much you could borrow if you want to.
Q: This is not a question but a complaint. We are nearing retirement age and ready to downsize, but the only smaller houses are in senior communities. We want new construction in a multigenerational neighborhood, but builders keep building larger houses, many with a lot of wasted square footage, which makes the houses unaffordable. Retirees, couples with no children, frequent travelers and even busy young professionals who don’t want the headache of maintaining a large home are left with no choice. Thus, we will stay in our present home. I am guessing there are many more in our situation. — B., askedith.com.
A: I suppose what you’re looking for might be found in an older neighborhood, which is more likely to hold a variety of homes. Newer developments may have building code restrictions on the theory that maximum value is reached when everything in a neighborhood is more or less the same size and costs about the same.
Keep looking. Your brand-new retirement home is out there somewhere — in a desirable neighborhood — waiting for you.