I Know What I Can Afford - How Do I Prepare Financially to Buy That Home? - Financially Confident Christian

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
You figured out what you cancomfortably afford for a home.
That's a huge step.
But now comes the dauntingpart, actually getting the money
together and getting your financesready for this massive purchase.
If preparing for the financial sideof home buying feels overwhelming to
you, first of all, you're not alone.
But stick with me because we'regonna break down exactly how

(00:20):
to do that on today's show.
Hey there, and welcome back to yourDaily Financially Confident Christian.
I'm Ralph and it's greatto be with you again.

(00:42):
As always, this is the show that helpsyou answer that question, how can I
become a financially confident Christian?
And we're deep into our home ownershipsort of mini series here in the midst
of our main series, and that's dealingwith the stress of money worries.
And yesterday we had a real honestand frank communication about
deciding if and when home ownershipis the right financial move for you.

(01:05):
I hope you really enjoyed that episode.
If you miss it, I'm gonnaencourage you to check it out.
But we talked about how you can assesswhat you can comfortably afford.
We looked at your budget, not just whatthe lender might offer, because truth
is the lenders will tell you you mightbe able to buy something, but you're
not gonna be comfortable with that.
But today we're gonna take thethe move and go to the next step,
and that is, Hey, I've decided.

(01:26):
It's time for me to startpreparing to buy a house.
So we're gonna talk about some practicalfinancial preparations needed because
once you decide on buying the house, thenext step is to really have this process
in place, because I get it, the financialprocess can feel complex, it can feel
stressful, but here's what I'm gonnatell you today, with focus preparation,

(01:46):
you can navigate it with greater peace.
So let's tackle the question for today.
I know what I can afford.
Now how do I preparefinancially to buy that home?
Once you've done the math, you know therealistic price range, and you're excited
about the possibility of buying a house.
Then you start thinking about thespecifics and coming up with that big
down payment money, or maybe navigatingthe mortgage application process and

(02:11):
then understanding the closing costs.
Trust me, those can bethousands of dollars.
Well, guess what?
Tomorrow we're gonna talk about themortgage application process, and
the next day we're actually gonnatalk about those closing costs.
Then the next thing after that, we'reactually gonna talk about managing
the expenses once you buy the house.
But listen, managing the expensesduring this transition are major

(02:31):
stressors for a lot of people.
They're complex, and the sheeramount of money involved can feel
daunting and anxiety inducing.
Trust me, I've been there.
But here's the thing.
You need to understand.
Preparing diligently for a majorfinancial undertaking, like buying
a home is actually a very crucialpart of why stewardship, and I

(02:51):
wanna connect it to the Bible.
I wanna correct it directly tothe biblical principles of careful
preparation and ensuring resources inorder before making a major commitment.
We talked about this yesterday,that Luke chapter 14, verses 28 to
30 reference, talked about the costof building that tower, making sure
you're, you're counting that cost.
I. But preparing financiallyfor a home purchase is an act

(03:15):
of responsible stewardship.
It just is.
It demonstrates foresight in it,demonstrates diligence in really
managing the resources that God hasgiven you and trusting him 'cause
you're going to need him through thisprocess, So now you're sitting there
going, Ralph, okay, you've got it.
I figured out what I cancomfortably afford to buy.
What can I do now?
How do I move from knowing what I canafford to actually being financially

(03:38):
prepared to actually buy that home?
But Ralph, I wanna do it with peace,and I don't wanna get stressed out.
Like I've seen some of my friendswho have gone through the process
and they are just super stressed out.
Well, I've got a solution for you.
I've got an actionable step.
First thing you've got to do is startbuilding up the necessary funds for
that down payment, for those closingcosts and for those reserves, because

(03:59):
I wanna make sure you're in, in agood financial profile that is strong
before you get involved in this toodeeply, because you got to really
be aware of discipline, savings andif financial cleanup in preparation
for the home purchasing process.
So I've got one action item for youtoday to help you focus on that practical
financial preparations for buying a home.

(04:21):
The first thing you absolutely must dois create a targeted savings plan for
those down payment and closing costs.
So once you've decided on how much youare going to spend for the house, then
you gotta start thinking about how mucham I going to need for a down payment?
There are different programs, FH,a, va, all those kind of things,
but you really have to start laserfocusing on are you gonna need

(04:42):
5% down or 10% down, or 20% down?
And you've gotta set a specificdollar amount that you need
to save without down payment.
Put that in writing, make a specialaccount or something like that.
Then the next step is to actually researchthe typical closing cost in your area.
Now, I will tell you generallyit's a general statement.

(05:02):
They generally run between two to 5%of the loan amount and, and you also
have to add a little cushion to that.
Once you do that, then create a focusedsavings goal for this amount as well.
Go back and look at your budgetand see what you can increase in
your savings towards that goal,because here's a little truth.
Every extra dollar saved,builds momentum for the future.

(05:23):
So once you've got that done, you put thatsavings plan together, then what I'm gonna
encourage you is continue to strengthenor maintain that emergency fund.
Because here's the thingyou need to understand.
Lenders want to see what they'llcall a financial reserve.
They wanna make sure that you have moneybeyond that down payment, because guess
what, they realize there are thingsthat are gonna happen once you buy
this home and you're gonna need thatemergency fund for those unexpected

(05:46):
home repairs or maybe those maintenanceissues that you weren't expecting.
I remember buying my first home twoor three weeks after I bought it.
The air conditioner blew up.
Fortunately, I had set asidesome extra money and I was
able to go take care of that.
But again, I'm gonna really try toget you to focus on building that
solid, emergency fund, three to sixmonths of essential living expenses

(06:07):
in that separate account, and that'sin addition to your down payment.
Now, while you're in this process, asyou're saving money, you're starting to
think about building that emergency fund.
Another thing I'm gonnahighly encourage you to do is
review and polish your credit.
Again, look at your credit score.
Look at your credit report, becausethat's gonna significantly impact
your mortgage interest rate.
So again, review it because if youdon't guess what's gonna happen, the

(06:30):
lender's gonna submit it to underwriting.
Underwriting's gonna say, Hey, wait aminute, Ralph, we got some problems.
Once you do that, then focus like alaser on paying all your bills on time.
Keep those credit card balances low.
As we talked about many times on theshow, below that 30% utilization, I.
Make sure you do that.
And here's one big takeaway from today.
A lot of people don't talk about thiswhile you're in this process, and I can't

(06:54):
stress this enough, hold off on buying anynew large purchases or going into debt.
And I'm gonna tell you basically for,for six to 12 months prior to getting
a mortgage, don't take on any new debt.
Go get, don't go get a new carloan or open a new credit card
or making any large purchases oncredit because here's the thing.
It can negatively impact yourcredit score and your debt to income

(07:16):
ratio, which is gonna make it harderto qualify or get a good rate.
So why do these things help?
I'm gonna tell you right now why they help'cause these focused actions directly,
they fight that struggle and that stress.
You've gotta plan.
I. You're prepared, so you're notgonna feel unprepared, and you're gonna
build the necessary funds both in thatemergency fund, so that way you can have
security for future homeowner costs.

(07:38):
And listen, policying, your creditscore and your credit is just gonna
give you a better interest rate andsave you thousands of dollars over time.
And if you don't go in the newdebt that keeps your financial
picture stable for the lenders.
And this is all about empoweringyou to get through this to the
house that you want because listen.
Home ownership is a blessing.

(07:59):
It does not need to bean overwhelming burden.
Well, let's pray together today.
Father God, we just thank you for thedesire for us having a stable home.
And Lord, we confess that financialpreparations for buying a home
feel significant and for manyof us, they feel stressful.
So we just ask that you would grant usthe discipline Lord and the perseverance

(08:20):
needed to save diligently for thatdown payment and plan for those closing
costs and build that emergency fund.
Lord, we just ask that you would give uswisdom in managing our budget and managing
credit during the preparation phase.
Help us to maintain, again, thatstrong emergency fund for the
future needs of home ownership.
And Lord, just guide us through everysingle financial step of this, ensuring

(08:43):
our preparation is thorough and rootedin wise stewardship and grant us
peace throughout this process.
And we ask this with confidence.
In Jesus name, Amen.
Listen.
Discipline.
Financial preparation is yourmost powerful tool for reducing
stress when buying a home.
Listen, buying a home is stressful.
Moving is stressful, but focus on savings.

(09:05):
Focus on maintaining those reserves andkeeping your financial picture clean.
'cause you're building the foundationfor a peaceful home purchase,
even if it's a year, two years,or three years down the road.
And if you found this episodeuseful, I'm gonna encourage you.
Other people are going through thissame thought process right now.
I'm gonna encourage youto share it with them.
You can find resources and connect withthe show right at our website that's

(09:28):
at financially confident christian.com.
And while you're there, I've gota special gift for your journey.
For the first 100 listeners who goto the website, financially confident
christian.com/master, I'm gonnagive you a free copy of my book.
It's called Mastering Your Finances.
It's quick, it's a powerful redesign,is a starting point to help you
break that cycle of financial shameand really step into confidence.

(09:52):
So again, go to financiallyconfident christian.com/master
and get your free copy today.
Now, tomorrow, as I said, we're gonnabe talking about the mortgage itself
and how to navigate that mortgage maze.
I'm gonna talk about the differentloan types and how to choose the
right one so you don't wanna miss it.
So make sure you join me tomorrow.
Now let's all go out there and bethose financially confident Christians.

(10:15):
You can do this.
I have confidence in you.
Have confidence in yourself.
Stay financially savvy.
God bless you today, andyou have a great day.
I.

All Episodes

I Know What I Can Afford - How Do I Prepare Financially to Buy That Home?

Episode Transcript

Popular Podcasts

Bookmarked by Reese's Book Club

Dateline NBC

On Purpose with Jay Shetty

.css-15opob5{left:0;position:absolute;top:0.8rem;} All Episodes

.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}I Know What I Can Afford - How Do I Prepare Financially to Buy That Home?