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It is the personal choice.
That is their choice, my first home loan was at 18 percent, it got me started.
Financing is something personal. I do not interfere.
If they want to go ahead with the home they like with this type of loan, why not?
just looking back on some of the old questions and answers, looks like you got some good replies here.
It's not my decision to make, but I can let them know about the risks.
I inform and let adults make their own decisions.
I do not encourage someone to do anything that I don't think is smart. I would point out the drawbacks and talk about the possibility of waiting. If they insist on moving forward knowing the consequences then I will do as they wish and say no more.
"Really can't afford it". Those are the key words. I would handle the situation with kid gloves because you don't want her calling some other agent because you refuse to look at propoerties with her.
Its what you think, its what they want to do is important. You are real estate agent not a financial advisor. I will ask them to consult their accountant or attorney for a more credible opinion
Charles - I look at it this way, who am I to determine what my client can or cannot afford. As their agent, I do not know everything about their lifestyle, their debt, or how much they make. I may have an idea about some of these things, but I certainly do not know everything about them, their spending habits, or how disciplined they may or may not be. If they qualify financially, then it would be completely their decision whether they felt they could actually afford it or not.
So what I would do is explain exactly what their interest rate is that they qualify for, and try to present to them as close as possible how much their payment would be. I would also include all closing costs, and any additional expenses they may have related to the home purchase; repairs, landscaping, appliances, utility costs, etc. They I would tell them that the decision is completely up to them whether they feel they could afford the loan or not.
If they tell me that they can't afford it, then I would absolutely agree and support their decision 100%.
I do find it interesting that most people said they would advise the buyers to wait because things may be better later. Things could also get worse if homes are appreciating and interest rates are rising. They may be priced right out of the market.
One other thing is that after a couple of years, they could also refinance and possibly get a much lower interest rate, depending on the market of course.
I always tell my clients that they need to find a payment that would be comfortable with them. If your clients could not afford it, it is your obligation to get them to tap the brakes a bit so that they could save more money for a down payment that will reduce their monthly obligation, or to reduce the amount of the load by purchasing a less expensive home. You will be doing your clients a tremendous service by counseling them in this manner.
If they say they really can't afford it then I would encourage them to wait.
I would tell them to wait, too. And, be sure that they are improving their credit scores every month.
I would enourage the buyers to wait, and develop a strategy for improving their credit/financial profile.
I would advise them to wait. Especially if they can't afford it.
I would counsel that buyer to think long and hard about the financial impact of a high interest loan. After that, it's their decision and I'm there to help them get to where they wish to go.
I tell hem to thinkhard about it.WAiting 6 months could change everything and make it much more affordable.
I tell them to wait. I always put my clients best interest ahead of making a sale. I want life time clients. Basically I think of their interestr ahead of mine and my business