How Much House Can You Afford?

Experts Weigh In on Buying in a Bewildering Time

The past two years have demonstrated in dramatic fashion what can happen to people who overreach to buy the home they want.

The lesson: Qualifying for the mortgage does not necessarily mean you can afford the house.

What house hunters need to do is assess their financial situation, make a budget and decide how much they can afford to put into a mortgage each month.

"Home buyers always come to mortgage people and say, 'How much can I afford?' " said Christopher Cruise, who trains loan officers and mortgage processors. "Instead, they should be saying: 'Here is what I am willing to pay every month. How much of a loan will that get me?' "

For some, the answer may not be what they want to hear, especially in pricey markets like Washington.

But listen carefully.

If people tell you that you're better off waiting, then wait -- or at least scale back your expectations.

"There's nothing wrong with taking time to save for a large down payment or, heaven forbid, buying a smaller house," said Barry Glassman, a financial planner in McLean.

The most common pitfall is failing to anticipate the future and lifestyle changes such as marriage, children, giving up dual incomes so one parent can stay at home, and changes in income or job relocations, said Ric Edelman, a financial planner in Fairfax.

"Historically, people bought homes in their 30s and 40s, not in their 20s, when life is too dynamic," Edelman said. "If you can't anticipate what your life is going to be like in five years, then you're not ready to buy a house."

Edelman said the tendency for many would-be buyers is to concentrate on the purchase and not the ongoing cost of ownership.

"But buying the home is like getting married," Edelman said. "Don't overemphasize the wedding. Focus on the marriage."