“Honey, the bank thinks we’re rich!
They just approved our mortgage for how much???”
I remember a situation from many years ago when one of my (then) employees decided to dive into home ownership and buy her first house. A few days later, she came into my office walking on air, to tell me that she had just been pre-approved for a $500,000 mortgage. She then went on to describe how she was able to go look at far larger homes than she had originally thought she would be able to, for her first one. Additionally, her bank was giving her a screaming good interest rate for 3-year term.
She was so excited, but I was worried.
At the time, she was one of my most successful employees and deserved a nice home.
But I also knew how much she netted on her pay.
And, I knew that maxing out her potential pre approval was risky!
Continue reading →