The First Time Home Buyer’s Journey Begins


You can feel it. It’s time to buy your first home.

But where to begin?

The information you’ll need is unlimited. You might have already noticed how contradictory it is.

What if there was one person – a trusted advisor – who you could rely on to make your first time go easier?

You have questions. The answers you need are one phone call away. A safe-harbor in a dizzying sea of confusing information…

For nearly 20 years, I’ve helped home buyers in the Chicago area. Now I offer you my knowledge.

Not confusing industry jargon. Easy-to-follow explanations is what you’ll receive.

As your personal home buying coach, you will have access to secrets, expert strategies and money-saving advice that you will use forever.

Knowledge is power.

Right now, you don’t know much about the home buying process. That’s perfectly understandable.

But where to turn? Do you go to a realtor? Do you need to talk to a mortgage lender?

These are common questions. So if you are asking yourself any of these… you are on the right path.

Let’s look at the answers to each question.

Starting with a realtor is the wrong approach.

This is because it’s smart to make sure you know how much of a house you can afford prior to going to the store.

In this case, a realtor is the store.

Rather than spending time and energy shopping for a home – and unless you are going to pay cash for it – having the ole finances in order is the right place to start.

Contacting a loan officer first is the best of these two options. The right loan officer will help you apply for a mortgage.

But how do you choose a state licensed loan officer who you can trust? Even if your friend suggests using her loan officer, is that friend experienced enough to make a quality and vetted referral?

Maybe you feel it will be easier to just walk into – or call – one of the mega-banks. Is applying for a mortgage through an online system safe yet?

(More on the potential downfalls of using big banks later.)

The questions I propose are not intended to confuse you – not at all.

Each question is common. The answers are not.

It is for this reason I am offering personalized answers to the questions you already have… as well as many questions you can’t know exist yet.

Take Action

If you are in Illinois or Indiana, and you are in the beginning stages of your home buying journey, click this link to go to the home page for your opportunity:

Your Home Buying Coach

You will be safely directed to my online headquarters. The page highlights some of your benefits, and offers two ways to get in touch.

Allow me to put my boring – yet vital – secret knowledge to work for you.

5 Questions To Help You Answer the “How Much House Can I Afford?” Question

The most pressing question on Chicago area home buyers minds is, “How much house can I afford?” The information you need is right here in this guide.

Hello, my name is Brian Hayes. I’ve been helping my customers understand how much house they can afford for 18 years.

Since retiring from the mortgage industry, my focus has been on consulting and coaching Chicago area home buyers.

Enough about me, but know you know this isn’t my first shindig.

As you read, please understand I understand this subject extremely well. Believe me, I do wish this was as easy as applying for a credit card. Unfortunately, it’s not that easy and requires a longer guide.

That guide is right here.

The reason why an online home affordability calculator cannot accurately provide what I can is pretty simple. A computer cannot analyze your credit history, or make the required adjustments to your monthly income. There are more reasons, but these are the most two important.

It’s time to begin.

When a home shopper asks me how much of a house they can afford, what do you think the very first thing out of my mouth is?

You might think it’s, “how much money do you make?” Or, “how is your credit?” While those are important questions – and they will be covered later – the first thing I always ask is:

What are a few areas that you think you want to live in?
Question #1

So much of what we are about to cover has to do with establishing the proper mindset early. Much like building a home, a strong foundation is required. Everything from here on out is designed to help you stay comfortable throughout – and beyond – the completion of the home buying process.

If you haven’t already, start to use the internet to find homes that meet your geographical needs. You are not home shopping at this point. The goal is to get a starting point, as well as some key financial information – such as home prices, and property tax costs in the area.

How much money are you going to be comfortable spending – each month – toward your housing expenses?
Question #2

This is where we start to get into finances. Now that you have a sense of how much homes cost in the areas you want – or need – to live in, the next step is to outline your monthly payment comfort-zone.

The best way to do that is to think about how much you spend each month now. For example, if you currently spend $1700 on rent, use that as a starting point.

Maybe you feel you can stretch that to $2000 because the extra $300 can be viewed as an investment. Or maybe you are nearing retirement and would feel more comfortable around $1400.

This is your house, your life and ultimately the monthly payment is an expenditure you should be comfortable with.

How much money do you currently have in the bank that you are willing to use toward your home purchase?
Question #3

Let’s assume I am buying a house. After determining I can afford up to $1700-$1800 each month, I scan my bank account balances.

The balances between 3 accounts total $20,000. Just knowing myself tells me that I want to have about $5000 left over after I close on the new house.

This means I currently have about $15,000 that can be used toward a down payment, closing costs and all of the other little items that add up during the home buying process.

What other liquid assets do you have available, or access to?

Liquid assets include – but are not limited to – stocks, mutual funds, CD’s and other verifiable assets that can be liquidated and deposited into your checking account.

You can also include any contributions from parents, children, brothers or sisters. Contributions like this are called gifts inside the mortgage industry.

We will cover how the gift process works later. For now, just think about if and approximately how much you can access.

What’s the approximate total of #3 and #4 from above?
Question #5

Sticking with our example – and assuming I will not be receiving any gifts – I would write $15,000 in for the answer to question #5.

Summary Time

Work through the five questions until you start to feel comfortable with your answers. None of this is concrete, and will probably change a bit as you proceed to the next steps. However what you now have is the foundational information you need.

In the next post to this guide, we will take the next step which is safely obtaining a free copy of your credit report, preparing your income and asset documents and organizing all of it so you can easily grab it when it’s time for you to apply for a mortgage.

Post Notes

Here are some additional posts you can browse through.  Each expands on the topic of buying a house you can comfortably afford.

Read: How To Buy a House: Start Here was published to this site in 2014 and has some helpful methods and tactics.

Read: How to Buy a House: The 2nd Step accompanies Start Here.

It Started on a Bright Morning in 1997

Don’t drink the water – from the red tabbed dispenser on the office water cooler.

After taking a quick sip, and spitting hot water all over the floor … day one’s lesson was over. In my feeble defense, it’s called a cooler.

I had just graduated with a “can get you on a bus, if you have a quarter,” political science degree. Little did I know then, life has this way of working itself out – if you let it.

That was 1997 at the now defunct Norwest Mortgage. I was hired to be a sales assistant for a busy loan officer.

“I’m really not that good at math,” I said during the phone interview.

This wasn’t your average interview. A close family friend was looking for an assistant so he could take his business to the next level.

“Umm … well that’s okay. It’s all pretty basic, and we have calculators that do it all.” Scott said.

I learned the business from the basement to the penthouse. It’s funny to look back to the beginning.

Emailing, uploading files and cell phones were just starting to creep into the day of a professional – at least in the mortgage business. Remember faxing, overnighting and green computer screens with greener text?

Quick story

My five year old nephew asks me, “what do you do at work?”

Lately I’ve been explaining, “I help people get credit so they can buy houses.”

“Like credit cards?” He asked. Of course, he still thinks credit cards are free money.

“Exactly like credit cards!” I exlaimed.

As far as not drinking the water goes … don’t. Just because it’s written, spoken or acted out – be careful with what you allow yourself to believe.