This morning I took a call from a desperate loan applicant who  has no chance of finding a solution to her situation.  She is a single mother of 2 kids who makes about $25,000 a year, taking home about $1,400 a month after taxes.  If you add in the child support of $600 a month, she brings home almost $2,000 a month.

Three years ago a Loan Officer and a Realtor helped her to buy a home or her and her two kids.  Because she had high hopes for finding the perfect home and because she had very strong credit, they helped her buy a home for a little over $200,000 with no money down.   Stated income pushed up "just a little bit".

At the end of 2006, her interest rate adjusted and her payment went up a few hundred dollars.  And so did her taxes.  Barely squeaking by at her initial payment of $1,500 a month, the change to $1,800 a month almost destroyed her.  For the last 12 months, she has still mananged to make her mortgage payments on time, with only $200 a month extra cash.  Not really a great quality of life.

Now her rate is due to adjust again.  You do the math.  There is no way she can continue to make her payments, and due to a change in market values, she can't even sell, as she is probably at about 115% of the value.

The American Dream is to own a home.  Make sure that dream doesn't turn into a nightmare.  \
I spent a half hour this morning listening to a single mother of two kids cry on the phone an beg me to find some way for her to keep afloat.  AND I CAN'T.

It was a horrible reminder of what we in this industry have the power to do.  We need to educate our clients and make sure we help them make the right decision on a home.  Not everyone is ready to buy their dream home.

If you are a Realtor or Mortgage Professional, please think of this the next time someone is trying to purchase out of their real price range.  A pre-approval means they CAN GET a mortgage.  It doesn't mean they can afford it.

If you would like information on how to ensure you are getting something you can afford, or if you are a Realtor, to help your clients make the right decision, please feel free to call me.  And if you would like access to a great educational resource, please feel free to request a 24 page homebuyer's guide from me, either by phone to me or online at either www.themortgageinfosite.com or my company's website www.athomemortgagecompany.com