Q

My wife and I are looking to purchase our first house. Do you have any guidelines that would help us determine how much we can afford?

A

I remember spending many a Saturday driving around looking for just the right neighborhood and just the right home when we were ready to buy our first house. It was an exciting time! Yet buying a home is also one of the most significant financial decisions we make.

In our search for the “American dream,” it's easy to let our eyes and emotions run way ahead of our available resources. Too often we see couples overcommit on the purchase of their home only to find that there isn't enough money left to meet the rest of the family's needs. I believe the greatest advice I can offer is to make sure you don't fall into this trap. In Luke 14:28-29, Jesus tells us, “If one of you decides to build a tower, will he not first sit down and calculate the outlay to see if he has enough money to complete the project? He will do that for fear of laying the foundation and then not being able to complete the work.”

Here are some ideas that will help you make a decision that will honor God and your family.

Examine Your Motivation

What is your motive for seeking a new home? Is it based on valid needs such as a growing family or is it primarily for status? It is so easy for us to get caught up in the status symbol of a home, which leads to purchasing more than we need or can afford. Before you make your purchase, come before Our Lord in prayer and seek his guidance over this important decision. Ask him to help you avoid the trap of materialism.

Establish a Solid Economic Foundation

Proverbs 24:27 says, “Complete your outdoor tasks and arrange your work in the field; afterward you can establish your house.” Here are a few questions you should ask before making a commitment to purchase a home: Do you have a stable job? Do you have the means to make an adequate down payment (preferably 20%)? Are you living on a budget? Are you planning in such a way that provides the maximum opportunity for your wife to nurture your children at home full time? Spending time now getting your economic house in order will reap big dividends in the future.

Buy Based on Need and Budget

Finally, most families (95%) don't have a budget. As a result, when they apply for a home loan they depend on the bank to tell them how much they can qualify for. Most banks use a formula that leads to a debt burden you will find oppressive (40% of gross income allowed for all debt payments). Take your budget to the bank and show them how much you can afford. This way you won't end up relying on credit cards to meet your other obligations because you have purchased too much house.

God love you!

Phil Lenahan is executive director of Catholic Answers.