The answer for me is always to buy a little bit under what you can afford when it comes to buying a property. I don’t think it’s wise to go to the maximum. Now, in many cases, the customer has no choice but to go into a price range that makes them very uneasy, but Police Mortgage tries to guide our clients into a more comfortable situation.
When it comes to your police home loan, on paper we're going to qualify you for far more home than you're probably comfortable buying. You can go all the way up to 50% of your gross monthly income. That doesn’t take taxes, 401k, pension, or your deferred comp into consideration.
Therefore, on paper you may be able to afford the house, but you have to look at the monthly payment. As I have said before, you don’t want to sweat your mortgage payment every month.
A couple of wild cards we talk to clients about are homeowners’ insurance and property taxes. These factors can make for a monthly payment that is higher than the homebuyer’s comfort level. Both can be very expensive and, unfortunately, I don’t see those two costs going down anytime soon.
When it comes to homeowners’ insurance, the insurance companies aren’t excited about covering damages. Whether it’s the fires in California or the hurricanes in Florida or a number of other natural disasters they want to raise premiums. That's their business model. It's a risk-based product. I'm not blaming them but it does create higher monthly expenses for homebuyers today and it forces many of the first responders we work with to make some tough choices when it comes to buying a property.
I heard a statistic recently that I still can't believe. The average age of a homeowner in the United States is over 40 years old. To me that's crazy. If that's true, then I wonder if our younger clientele will ever be able to afford to buy a home? The cost of living is definitely a concern.
That sheds light on the importance of financial discipline. Online shopping is so easy today. It's so easy to spend money now. At Christmas time you just go to the Amazon app on your phone, right? You need something you go to Amazon. You want to be able to look at your monthly mortgage payment along with your other bills and have it under control. The way to do that is to plan early.
If you want to be a homeowner within the next five years start setting up your finances now. It's not impossible. You need to save money. There are a number of good low-money-down options today for law enforcement home loans. The question becomes can you afford the month-to-month expenses that go with the mortgage payment?
That’s why having the right loan officer and the right company behind you is so important even when you are just beginning to think about a police officer mortgage. We advocate for home ownership. Police Mortgage loves to educate our clients. We feel that if we are helping our clients learn and that helps them to eventually become homeowners then we are successful.
We enjoy helping people do a financial assessment and take a deep dive into what they're actually spending month to month. Take a look at your disposable income and see what you can sacrifice to achieve your goal.
Financial literacy and financial planning are important. Understanding the concept of compound interest, as well as your short-term and long-term financial goals are essential. I think the longer you wait to gain that understanding the more hopeless the idea of becoming a homeowner becomes.
The barriers to homeownership may be greater today but it’s not impossible. Making a plan and buying a little less home than you can afford at first are prudent ways to start. Police Mortgage is here to help you create that plan and give you the knowledge you need.
Police Mortgage specializes in conventional mortgages, purchase money transactions, FHA loans, and VA loans. Led by founder and CEO John Aretos, Police Mortgage is known and respected for providing clients with exceptional service, customized terms, quick and easy closings, and low money down options. To learn more about Police Mortgage, call 312-499-8878.
Police Mortgage for First Responders Who Are Second to None.
