Home sweet home…or is it? The questions every first time buyer must ask.

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In a world where crushing debt keeps you trapped, where living paycheck to paycheck has become your new normal, and where the dream of retirement seems impossibly out of reach, there's hope. Join financial evangelist Ralph Estep Jr. A man who's walked through the fire of financial failure and emerged stronger on the other side.

Welcome to Ask Ralph, the show where real world experience meets biblical truth to break the bondage of financial despair.

Get ready to take control of your money, break free from the financial stress and align your resources with God's purpose for your life. This is Ask Ralph with Ralph Estep Jr.

Ralph
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Well, welcome to the show tonight.

I'm so happy you joined me. Today we're going to talk about your dreaming of buying your first home, but you're feeling paralyzed by fear or uncertainty. Maybe you're overwhelmed by financial responsibility, or you're worried about making a mistake or dishonoring God in the process. So tonight's goal, I'm going to answer that question and I'm going to equip you with tools to approach homeownership with confidence and faith.

I'm going to discuss some financial readiness, how to choose the right home and align your decisions with God's will. Now this is your live show. So drop your questions in the chat about home buying, tonight's topic or anything else finance related, and I'll answer them during the live show. Another we added this week, if you want to support the show, you can go to askralphpodcast.com/support. Well, I'm Ralph and as you may know, I'm passionate to help you achieve financial success because I want to see you live out your dreams and I want to see you grow in your faith. And like I said, we're going to talk about a couple of things tonight.

We're going to talk about buying your first home, because listen, it's a big decision, both financially and spiritually. If you have questions about mortgages, budgeting, or choosing the right home, do me a favor and drop those in the chat as we go through tonight and we'll answer those questions. Now the first question we got is from Roxanne and Roxanne wrote me.

"Ralph, I received a letter from the organization assisting me with my foreign exchange student and wanted to know if there are any tax deductions available. I just listened to your podcast snippet on TikTok that said mileage related to volunteering is deductible.
The letter says they are a charitable organization and I'm a volunteer, so am I able to deduct that on my taxes?" Well, that's a great question. Let me switch over to here. And first thing I want to say, Roxanne is thank you for your heart of service. Its so fantastic that you're willing to host an exchange student and it's a wonderful way to bless others.
Now, here's the thing. You've kind of alluded to this. If the organization is a qualified 501(c)(3) nonprofit, and they confirm that with the letter that you sent, then you are a volunteer. So if you ask that question, here's the things you can deduct. Number one thing you can deduct is mileage. You can deduct mileage related to your volunteer activities.

Now in 2023, it was 14 cents a mile. I don't have that number right in front of me, but keep track of that. Do a mileage login. Anytime you're doing any work for this volunteer work, you can deduct that mileage. Another thing you can deduct are out of pocket expenses. That would be meals, school supplies, any event fees.

Now, if you're reimbursed by the organization, you can't take a deduction for those, but you can keep track of those. Now what you can't deduct, a lot of people don't understand this, what you can't deduct is the value of your time used doing this volunteer work, but you can deduct, like I said, your mileage, you can deduct your out of pocket expenses, but you can't deduct your time.

And you also can't take a deduction for a lodging cost in your home. So I hope that answers your question. So here's my pro tip. You asked me about what kind of deduction, but I want to give you a pro tip at the same time. Keep detailed receipts and mileage logs. That way, when you go to get your taxes done, you'll be able to give your tax person this information.

So you'll be able to take those deductions. So Roxanne, I just want to say thank you for that. And so here's my call to action, Roxanne. Keep records, keep receipts, and like I said, keep those mileage log and attach the nonprofit letter to support your deductions. That way, if a year or two goes down the road and you get audited, you'll be able to go back and say, Oh yeah, I've got this letter from the charity.

Here it is. Now, if anyone else in the chat has any questions about volunteering or tax deductions, you can drop those right in the chat. Now let's move on to our second question. Now, this question comes to us from Robin and Robin said this. He says, "Ralph, I have a quick question. I now (because of your good advice on your podcast),

well, thank you, Rob. And I appreciate that, use a credit card for my day to day business expenses instead of a debit card. Yeah. That's something I talked about on the show a couple of months ago. I'm not a huge fan of debit cards because it has direct access to your account. I'd much prefer if you're one is willing to pay off your credit card the other each month, I would much rather use a credit card. But anyway, let me continue with Robin's question.

Is the statements and receipts okay to include, and can I just have an expenses category, or is it better if I continue to break down my purchases into categories such as gas, propane, et cetera?" Well Robin, let me say this. That's a great move. Using a credit card for business expenses, it helps with a lot of things.

First thing it's going to help you do is track your expenses. And that's going to be beautiful when you go to get your taxes done. The next thing it's going to help you do is earn rewards because listen, as long as you're paying that off at the end of each month, then every month you're going to have rewards that you're going to benefit from.

And like I said, you gotta be careful with this. I've done many shows on this. If you don't pay it off at the end of each month, of course that could cause a problem. So if you're gonna be regimented and do that, then by all means do it. And the thing that I like best about credit cards, and this is why I'm not a big fan of debit cards,. Use that credit card because it gives you better fraud protection.

If you notice something strange on your credit card, all you've gotta do is call that credit card company and they can issue you a credit, they can do an investigation, they can set up a fraud alert. The problem is when you use your debit card, that money's coming out of your account right away. So I don't really like that.

Now here's the key points to your questions. You asked me about keeping receipts. I think that is critical because the IRS is going to make an argument that if all you have is the statement, then they might not give you the benefit of that. So you want to keep track of all those receipts because I've had situations where a client would come into me because they got an audit notice from the IRS.

And they said, well, Ralph, the IRS is asking for my receipts, but I didn't keep those receipts. I mean, I go to the fuel place. I get gas every week. I get this, I get that. Oh, I have my statements. Well, technically the IRS can require you to provide that receipt. And if you don't have that receipt, they couldn't disallow.

Now, from a practical standpoint, most of the time, if you've got a reasonable auditor that you're dealing with, they will understand that. But if you can keep the receipts, that's even better because like I said, credit card statements alone don't always justify those expenses. For example, let me give you a great one.

Let's say you go to Walmart. Well, if you have that on your statement, Walmart, it doesn't specify exactly what you bought. Now you could have bought office supplies, you could have bought supplies for your business, or you could have spent it on personal expenses. And that's where the IRS will get you.

They're going to argue, wait a second. How do we know that this receipt that you had at Walmart was actually a legitimate business expense, and it wasn't you buying groceries for your house. Now you asked about categorizing expenses. Now, this is an area where I think it's actually a very good thing to do.

I think that if you can categorize it by category, such as gas, like you mentioned, utilities, office supplies, maybe travel, maybe fuel, all those kinds of things are going to be more beneficial because one of the things I don't like to put on a tax return is a big category. It says something like credit card expenses.

And I've seen returns where other preparers have done that. I just think you're asking for a problem with the IRS if you do that, because you've not given them a breakdown of those actual expenses. I just think that's a real dangerous precedent. And also, the benefit of breaking those things down is going to make your tax filing easier, but even over and above that, what I really like about that is being able to compare year to year.

One of the things that I do with clients both throughout the year and a tax time is I like to take a look at where they were at this point last year. And if you don't have those things categorized into those category buckets, it's very hard to compare that. If you've got, income is this number and then you've got two or three expense items, it's really hard to tell, you know, what's going on with your business.

So I think it really makes sense to break those things down. So my call to action for you, Robin, is to make sure you break that down. But let me ask the folks here in the chat. How do you break down your expenses? If you've got some ideas, I'm going to encourage you to drop those right into the chat so that other people can learn from you.

Well, now let's get onto tonight's main topic and that's buying your first home. And I remember when I was about 21 or 22 years old, I went through this myself, but I got a question from Amanda. Now Amanda's question really kind of sums up what I want to talk about tonight. And this is what Amanda wrote.

She said, Hi Ralph, I've been saving for a house for a while. Let me pop her question up. It says, Hi Ralph, I've been saving for a house for a while, but I'm feeling paralyzed by the process. I keep hearing stories about people who regret their home purchases because they didn't plan properly. I'm a single mom, and I want to make sure I give my kids stability without putting us in financial jeopardy.

What are the key things I need to think about before I take the plunge?" Well Amanda, I'm going to just going to tell you right now, that is a great question. It's a question that I get a lot of times in my practice because so many people are feeling that same way. So let me break this down step by step.

Let's start with a Bible verse because I like to start with scripture and this comes to us from the book of Proverbs chapter 16, verse 9, and it says this. "The heart of man plans his ways, but the Lord establishes his steps." And see, if you think about it, this verse reminds us that planning is important, but we also have to rely on God's wisdom and guidance.

And see, a lot of people think that buying a home is just this financial decision. And of course that's a big part of it, but it's not simply a financial decision. It's a spiritual decision. You kind of have to put all of it into it. So before I get to the answer, let me just share my gratitude statement tonight.

My gratitude statement says this. I'm so grateful for the opportunity to guide and serve you on your financial journey, Amanda and other people who are asking questions of the show, whether it's making big decisions like buying your first home, or managing the resources God has entrusted to you, I'm continually reminded of how His wisdom equips us for every step.
So I just want to say thank you for trusting me to be a part of your journey, and I'm super excited to see how faith and sound stewardship will lead you to get to that financial freedom and fulfillment. So God bless you as we get started today. But let's talk about the four key areas that I think are important when you're thinking about buying that home.

So here are what I say the four key things that you should consider when you're buying your first home. Number one thing. And I always like to start here. I start with prayer. Pray for discernment, pray for clarity, you know, ask the Lord, is this the right decision?
Am I doing the right thing? You know, ask God to lead you in that decision of whether this home is going to be, what's going to be best to fit your needs. You mentioned you're a single mom with children. Make sure that it aligns with your finances because what you don't want to do, and I'm going to get to that in a minute.

What you don't want to do is put yourself in financial jeopardy, which you talked about in your question, which I think is a really good point. So you got to make sure that this decision aligns with your faith. And so maybe it's as simple as saying, Lord, listen. I really want my kids to have stability.

I've been dreaming about this home, you know, Lord, show me the way to do that. And I truly believe, this is why I do this show. I truly believe the Lord will guide you in that. So that's the first thing, seek God's guidance. You know, as I put that first, because I think that's where you got to start. The second thing.

And this is the thing a lot of people don't spend enough time on. You've got to assess your financial readiness. Are you ready to make this purchase? You know, have you developed a budget? Because one of the things that I see a lot of people do is they have this loose budget of, well, you know, I'm paying this much for rent right now.

So I really feel like I can, I can swing this. But the thing you got to understand is rent's one thing, you know, maybe you pay rent and then you have some utilities and all that sort of thing. But once you buy this house, you're going to have a mortgage probably. I don't think you're going to pay cash for it.

You're going to pay property taxes. You're going to have homeowner's insurance. You're going to have potentially where you live, maybe an HOA, which is, you know, what somebody going to pay into for common area maintenance. And here's the thing. One of the things I recommend you do now, mortgage loan officers will let you borrow more than this.

They'll let you take what's called a front ratio. And let me explain that for a second. A front ratio is basically your debt ratio of just the mortgage alone. So simple example. Let's say that your monthly take home pay is $1,000. And that's a silly example, but basically what that would mean is that they wouldn't let you take any more than a mortgage on more than $290 a month.

So that's at 29%. Again, if you, you're not going to find a home for $290, but let's say it's $10,000 a month. Then we're talking about a higher level income person. Well at that 29%, what that basically means is they won't let you take out a loan. It's what they call the front ratio of any more than $2,900 per month.

My personal belief, I think that's a little too high, especially for first time home buyers. I truly think you got to keep that in the 20 to 25 percent range. So let's just use, let's just say a simple, a better example is that you make $5,000 a month. Well, that 20 percent of that would be, you don't want to spend more than a thousand dollars a month on your mortgage.

Now that may make it tough to find a place for that, but that's what I'm thinking is you need to target between 20 and 25%. Now you can always reduce your mortgage payment by saving more and putting money down. Second thing I think is important as you're looking at the financial aspects of this. A lot of people don't think about this.

You've got to build that emergency fund. You really need to be saving three to six months of living expense. I know you probably hear it. I say this all the time on the show, but it's true because when you buy this house, there are going to be unexpected repairs or challenges. Let me tell you a story. I was telling you about when I was 21 and I bought my first townhouse.

It was a townhouse here in Newark, Delaware. And it was a fantastic thing. If I remember correctly, I think it was around $85,000 and it was a process. Anyway, I got through that process and to the last minute, didn't know if I was going to get this mortgage approval. Got approved, went to settlement.

That was a whole another discussion for another show. Went into, got the house, moved in, and about two weeks after I moved in now, this was in the middle of the summer. Two weeks after I move in, one day I was sitting at the dining room table or something. And I said, you know what, it really seems kind of warm in here today.

And I'm wondering, I'm saying I have air conditioning. It's not a real big house. It's a two story townhouse. And I look over to thermostat and the thermostat said something, I don't remember exactly, let's say 85 degrees. And I'm thinking, wait a second. Now I've got this thermostat set at 70 or 72. Back in the day, I probably had it set at 68 cause I didn't know what I was talking about. I didn't realize the cost of the energy of that. But anyway, enough said about that. But anyway, I was like, well, something's clearly wrong here. So I go look at the thermostat, the thermostat appeared to be working. And I'm not an HVAC mechanic by any stretch, but I walk outside and there's this outdoor unit.

If you know what I'm talking about, usually have an indoor unit and an outdoor unit. Well, I walked outside and the outdoor unit is not doing anything. You know, that's the big metal thing. And it's got a fan that spins on the inside. And I'm thinking, well, something doesn't seem right because when I used to come in through the back door, which is the way I would come in from my townhouse,

this unit kind of sat next to the door. So I'd always hear it running. Cause it wasn't a quiet thing. It was kind of loud, which maybe I should have realized. But anyway, we'll get to that in a second. So I'm thinking this thing's not running. I said, well, I got a feeling this air conditioning system's not running.

So long story short, I called the HVAC person. They came out and looked and they said, Ralph, I got some bad news for you. Your outdoor unit is shot. I said, what? I just bought this house. You know, I had a home inspection. I did all those things. And they said, well, unfortunately this unit's about 20 years old and that's about the life expectancy of that.
And I said, okay, well, what is that going to look like? I'm thinking, Oh, maybe this is going to be $500, $600. Well, no, it was about $2,500 to replace that outside unit. And I just bought this house. And to be quite honest with you, I didn't have that emergency fund. So I was scrambling, putting money on credit cards, making bad financial decisions, but I had this house.

I had to do something about it. So that's why I say, listen to what I'm saying with this. Make sure you've got an emergency fund because you're going to have those unexpected repairs. You can get the best inspection in the world, but sometimes things just happen. Now, while I'm talking about that, a few minutes ago, I mentioned one of the ways you can reduce your payment is to get a bigger down payment.

Now, right now we're going through, and I may do a show about this in a week or two. I just read an article on Apple news. I think it was yesterday about this. We're seeing a trend towards lower down payments. There are more programs out there for people who may want to do a 2 percent down payment or a 3 percent down payment.

Now I will tell you when I did mine, I did what's called an FHA loan. And that's where it's a government back loan. I only had to put 3 percent down. The problem with doing that is if you see a downturn in the economy, then you may be upside down on your house. The other big problem with it, and

I didn't really understand it at the time was that I had to pay this stuff called Private Mortgage Insurance or PMI. And basically what that is, it's an insurance policy that the lender takes out to make sure you make your payments because here's like I said, if you're only putting three percent down, it's going to take a long time to build up any equity in that house. So those are all the financial components.

Like I said, I think you need to consider your budget, don't take off more than you can chew. And like I said, keep that at 20 to 25%, you know, look at your emergency fund, make sure you've got at least three to six months worth of emergency fund set up. Another thing I'm going to recommend you do is also, you know, look at that down payment and see, is there a way to
push more you down payment. And you know, maybe that means Amanda that you don't buy that house right now because you don't have that emergency fund. You don't have that money for down payment. These are all difficult things, but I really think you need to consider the financial side. Now the next component to this is I think you need to focus on your needs versus your wants, because listen, it's real easy to get into this comparison trap.

Because a house makes you, you know, a house that meets your needs and fits your budget may not exactly be what you want. I mean, it's what you need, but not what you want. Whereas if you find this beautiful Taj Mahal house, Hey, this is luxurious. This is great. But the problem with that is it might create a burden for you financially. So you've really got to look at that needs versus wants. And that's not an easy conversation to have. It's a difficult thing to think about. Maybe your first house needs to be what I remember when I was younger, we used to call it the first time buyer or the starter home.

Maybe that's where you need to start. And then the third thing, or the fourth thing, excuse me, that I think you need to do is make plans for the longterm. You got to really think about how long are you going to live in this home? Consider factors like the location. You know, Amanda, you mentioned that you've already got children.

I don't know if you're planning on having more children, but if you're somebody else listening, you're thinking, well, you know, right now it's just my husband and I, or maybe it's just me. I'm just buying the house on my own. You've got to think about what that long term situation looks like. Do you plan to marry?

Do you plan to have a relative living with you? Maybe you have an elderly parent that you're planning on taking care of in your own home. You've got to build that into that front end discussion, because you've got to think long term with this, because you're making a long term commitment.

Most people take a 30 year mortgage. So you figure if you're taking a 30 year mortgage, it takes a great deal of time to get back to a point where you could sell that house and be able to walk away from it without owing more. So you got to think about that and build that stability into it.

So those are really the things I'd look for. Now, here are some what I call common mistakes for first time homebuyers. One of the things that, and I don't see this quite as much when I talk to my realtor clients and my mortgage clients. Most people are doing this already. They get pre approved for a mortgage because the truth is most reputable realtors aren't even going to show you a house if they don't have that pre approval in hand. They don't want to waste their time. They don't want to waste the seller's time, but if you're a serious buyer, you absolutely have got to have that pre approval because for two reasons.

Number one is going to make you stand out as a serious buyer, which is important.
Number two thing, it's really going to tell you what you can afford because the mortgage company is going to run some basic ratios. They may pull your credit. They might look at some things that are specific to your situation. Because if not, you might be out shopping for a home that you're never going to qualify for.

You might be shopping for a home that they're never going to approve you for. And see, the thing is, if you don't have that pre approval, I think you're going to have a hard time getting an offer accepted because to be blunt with you, if I'm the seller and you come to me and you've got an offer on my house, the first thing I'm saying to my realtor is, okay, let me see their pre approval letter.

Cause I don't want to take my house off the market. I don't want to take this risk that, 30, 60, 90 days when they come to settlement, you're unable to fund this thing. That's just not a good thing to do. Another thing. A lot of people mess up on this. It's one of the common pitfalls.

And I talked a little bit about this a few minutes ago, that emergency fund. You've got to account for additional expenses. It's not just a mortgage payment. You're going to have that property tax, you're going to have homeowner's insurance. Like I said, HOA fees, maintenance costs, and those things can be significant.

They may add 10 or 15 percent to your mortgage payments. You got to factor that into it. So make sure that you're doing that budget. Make sure you're looking at those financial aspects of that. Here's another key thing. A lot of people do this. Don't spend all your savings. I don't know how many people I've seen, they buy this house.

I've been in many homes and people buy this house. And it's one of those big house that we used to call like mansions, you know, and you go in a house and there's nothing in the house because they can't afford to furnish it because they spent every last dime getting that mortgage, getting that down payment and getting into that home and how in the world can they enjoy it when they're so tight, you know, they're is what we call house poor.

And I see so many people that make that decision. So if you listen to Ralph, I'm going to tell you, don't go down that approach because depleting your savings, it just leaves you vulnerable for financial hardship. Think about what I told you about with my HVAC. It's in the middle of the summer. Yeah, there were windows in there, but it's a 90 degrees, 95 degrees in an interior unit townhouse, you're not getting a lot of movement. And if I didn't have the credit card and some family members to help me out, man, I would have been up the creek. So think about that. So don't spend all your savings. Another thing, be realistic about affordability. If you sit down and you plan a budget and do that before you go looking, because it's real easy to get emotionally carried away

when your realtors out showing you all these beautiful homes and this one's in a great location and this one has a swimming pool and this one has a swing set in the backyard for the kids. If you don't have that budget set up and you don't plan to stick to that budget, you're going to find yourself in trouble.

So you've got to be realistic about that. Even if that means you have to buy a smaller or less expensive home. Because overextending yourself financially because of excitement of purchasing a new home is going to be an appetite for disaster. You are going to rue the day that you did that. Another thing you want to think about. Now, this is more of a credit decision.

And if you work with a realtor, they're going to tell you about this. You got to be really careful about your credit from 6 to 12 months before you apply for that mortgage and look, here's another thing. A little pro tip. While you're in that mortgage process, don't buy anything where you're putting it on credit, where you're putting on a credit card, don't go buy a new car because the mortgage company is going to look at that.

And that could significantly affect your credit score. And if your credit score is right on the cusp of not being approved, or maybe it puts you into a different tier of credit, it could jeopardize your loan approval. I don't know how many times over the last 30 years that I've been working with clients is they were like a week away from settlement and all of a sudden the mortgage underwriter calls and said, Hey, we didn't realize that you just opened up this new credit card with this $10,000 spending limit.

And they said, well, yeah, we got the credit card because we need to buy furniture. Here's the problem. If we add that to your debt ratio, then potentially you might not qualify for that loan. So it is absolutely key that you maintain financial stability throughout that mortgage process.

You don't want to ruin what you've worked so hard to get to. Another thing I'm going to encourage you to do is don't max out that mortgage limit. Like we talked about. They might give you that 29 percent front ratio, and maybe even that 45 percent back ratio. Back ratio means your mortgage plus any other installment, your car loans or anything else, student loans, that kind of thing.

But that doesn't mean you have to spend it all because just borrowing what they approved you to may not align with your long term financial goals. So you've got to choose a mortgage that fits your overall budget and your overall financial plan. And as I talked about. Plan for the future. Consider how this house is going to meet your needs
not for the next 6 months, not for the next 12 months, for the next 5 or 6 years. If you're going to have that growing family, or maybe you've got a job where there's a potential that you can get relocated. I did a show a few weeks ago about this. There was a client I had down in Tennessee and he had this house and he had inherited some money from somebody and I told him not to do it, but he took a hundred thousand dollars of this inheritance and
he put it into his home. Now, this wasn't a first time home buyer for him, but he spent something like $50,000 on this home theater, and he spent another $50,000 or I think it was $25,000 on this beautiful koi pond. And then he took his garage and he converted into an exercise room. So he had sunk a hundred thousand dollars into this house and I warned him against it.

I said, dude, you're probably not going to get that out of it. And I said, if you need to, oh no, Ralph, I'm never going to relocate. I love my job. And then all of a sudden, two or three months later, he calls me and he says, Ralph, guess what? I got a great job offer. I said, well, that's fantastic. I said, you know, where's the job?

Well, unfortunately, Ralph, it's across the country. I said, now that conversation we had a few months ago about locking all that money into their house comes around and he goes, yeah, he says, I don't know what I'm going to do. Well, long story short, he ended up losing his shirt on that. He didn't get back any of the money he had put into it.

He just barely was able to sell it because he didn't want to have two mortgages. So you really need to plan for the future and find a home that offers flexibility and it allows you to evolve as your life evolves. Another key thing. Don't ever skip a home inspection. Now, I am not a huge fan of home inspections, but I think they have some value.

I think that there is something there. Now I've been through where home inspectors didn't find things, but a lot of times they do find things and it can help you identify problems. If nothing else, they might be able to tell you, like in my case, when I had that HVAC unit, I wish that the home inspector had said to me, Ralph, well, you know, this HVAC outside unit's about 20 years old and that's about 20 years.

That would have been helpful information for me because I might've said, well, maybe I'm going to look for a new house. Maybe I'm going to look at a house down the street because maybe they'd already replaced their HVAC. So those home inspections can give you some heads up. They're not going to find everything.

If you think they are, you're mistaken. And if they do find something and I'm not bad mouthing home inspectors, but if you read the fine print, generally, they're only liable for whatever the cost of that home inspection is. So if you pay $500 for a home inspection and they miss something, the maximum amount they're going to give you is 500 bucks.

But it's something. If you're like me, you don't know how the mechanical stuff works. You don't understand plumbing or electricity, I mean, basically understand it. But if that isn't what you do every day, then you may very well be well suited to get one of those home inspections because it can save you from headaches in the future because you'll find out about those things already.

And like I said, worst case scenario, you can say to the seller, Hey, I had a home inspection and we found this, this, and this. So it's great, I think. And the last thing. And I don't want to dwell on this too much, but it is so easy to get your emotions run wild. So I'm going to encourage you to keep your emotions in check.

It's so easy to make some impulsive decisions. You know, maybe your realtor says, well, you know, I know Ralph, you told me that your price points around $250,000, but listen. There's this new home that just opened up. It just went on the market. And you got to see this place. Now it's actually a little higher than what you wanted to spend.

It's around $300,000 Ralph, but wait, do you see this? It's got great curb appeal and it's got great bones and everything. But then you're making this emotional decision because you go there, I'll give you a great example of this. So I guess it was about six months ago. My youngest son decided he's going to buy a new truck and he went to the car dealership and I wanted him to go through it.

He's 23 years old. It made sense for him to go through this. So he went to the car dealership and he was looking for a truck. And so he said to the car salesman, he said, like, I'm going for a truck and of course what the salesman did, which I don't blame him, he put my son in the highest level truck they have.

And that was what he wanted him to test drive. So, you know, it's the truck that has the four wheel drive and the leather seats and the bells and the whistles and the, you know, all those things. And of course my son says, Oh, it's a sticker price on this. And the guy goes, well, you know, it's a little bit more than you want to spend because my son had told him, look, I have a fixed amount that I can spend.

And of course the salesman didn't want to hear that. The salesman wanted to sell him the highest car he can get. So he puts them in this truck. It's got all the bells and whistles, the four wheel drive and everything that he wanted. But the problem was impulsive wise, he only had so much money to spend, but once he saw, Hey, this is so nice.

Maybe I can find an extra thousand or maybe I can find an extra 2,000. And that's why you really got to start off the front end to have that budget. You know, make rational choices. You know, think about those needs versus wants. I know my son called me and I said, listen, son, I understand. It's your first new car.

I get that you want to have the best car that you can buy, but you also have a realistic budget number. There's only so much you can afford. And just like the book of Psalms says, I'm going to read this to you. It's from Psalms chapter 145 verses 14 to 19. And it says this. "The Lord upholds all who are falling.

The eyes of all look to you, and you give them their food in due season." So you've got to think about that divine time. You got to remember that verse, because you don't want to make those impulsive decisions, especially listen. When you make an impulsive decision, we're going to go out to dinner tonight.

It's not going to have a huge financial impact, but if you make an impulsive decision and you go buy a home that you can't afford because, Oh yeah, maybe the mortgage company lets you do it. And you're going to say, Oh, Ralph, if I couldn't afford it, they wouldn't have let me. That's just not the case.

You've got to still take that financial stewardship and make sure you guard your resources in doing that. So what about you? If you're thinking about buying a home, you know, what's your biggest concern? Drop me a line, go to justaskralph.com and tell me what's your big concern. And I'll answer those in future shows.

So Amanda, I want to give you some steps that you can take to make the best decision. First one, like I said, create a detailed budget. Include your mortgage, include your taxes, include your insurance, all the maintenance costs. Talk to other people who maybe own a home in the development. One of the big things that I tell people to do is go talk to your future neighbors and ask them what's going on with the development.

Second thing, Amanda, make sure you're saving for that down payment. I want to tell you, I really think, you know, the 3 percent is great, but I think you need to aim for 20 percent or you can explore those FHA loans because they give you those lower down payment options. They require you to do counseling and they've got some insurance, but just remember, like I did when I bought my first house, you're going to be paying that PMI insurance and that's not cheap.

So just be aware of what you're getting into. And the biggest takeaway from tonight. As it relates to that first home buyer thing, surround yourself with competent advisors, you know, work with a Christian financial counselor, work with a real estate agent who shares your values, is not going to sugarcoat things, is going to hold you to that budget because listen, at the end of the day, the realtor wants to sell a house.

It doesn't make a lot of sense for them to go show you stuff you can't afford or to try to put you in a house that you're never going to get approved for. So those are really the big things. So create a budget, save for down payment and surround yourself with trustworthy advisors. So as I always end the show, I like to talk about some reflection questions.

So as you're thinking about this, Amanda and other people listening, have you prayed specifically for God's guidance in your home buying journey? I started there. Have you asked God for His wisdom? Have you said to God, listen, I'm getting ready to make a big decision here Lord. What do you think I should do?

Second reflection question. What steps can you take today? I mean, right now to prepare financially for home ownership, because listen. This is not like a spur of the moment decision. Like I said, it's not like going out to dinner. Maybe you're going to drop a hundred dollars for a dinner. If you go to McDonald's, it'd probably be half that.

That's a whole another topic for another show. But what can you do right now to start building that financial responsibility for homeownership? So that's the second. Pray about it. What can you do to prepare financially? And number three, are you going to be content with a home that meets your needs?

Because I think you need to go there. You need to really deep down think about is this house going to meet my needs even if it's not your dream home. Because sometimes we have to make decisions in life that aren't the dreams but they're the you know, it's that needs versus want things. And i'm gonna ask you this. If tonight's topic resonated with you, the things I would encourage you to do is book a call with me.

You go to write to askralph.com and right at the top of the screen, you can click a button that says book a call. And I can help guide you through this process. I'm not a realtor. I'm not an attorney, but I can help you with the financial side of this. A lot of people don't think about that. They jump right to the realtor.

And I'm not bad mouthing realtors. Realtors are great people. I have many realtors that are clients, but I think it really makes sense to get your financial house in order. You know, we'll take a look at your budget. We'll take a look at your credit. We'll try to decide what you can afford so you have this realistic view before you get into that.

Now, one of the other things I'm going to encourage you to do, I write a blog post for every day show. You can check out my blog post at askralphpodcast.com/blog. When I do the blog posts, I go deeper. I put more research in it. If I talked as much on the show as I do on the blog, you'd have tuned out 20 minutes ago.

So I really encourage you to check that out. I do that every day when I release my daily shows. And don't forget, like you did tonight, join me at 7 PM on Tuesday night. You can come get your question answered and right here in the live chat. So just to recap. We tackled the essential questions that every first time home buyer must ask.
And I know that wasn't an easy conversation. It's so easy to get tied up in the emotions of that. And Chris, thank you for your comment. Chris and I've talked about buying a home as well. You know, he's asked me before, Hey, you know, what's a good time to buy a home. And you really have to plan this thing.

It's like I said, it's not some, let's go out to dinner thing. And balance that with faith, because I think that's such a vital important. So as I close, remember this, and I know you feel this. And I hope you liked the new studio. We're actually going to be moving into a new studio right now. I'm just doing a temporary thing here at my desk, but we're actually going into a new studio.

So in the next couple of weeks, you're going to see some really cool things with the show. But anyway, as I close tonight, remember this. My passion is to help you achieve financial success. That's my goal here. I want to see you live out your dreams. I want to see you buy that dream home. Absolutely.

But what I don't want to see you do is go into bankruptcy because you bid off more than you can chew. So I want to see you do that. I want to see you grow financially and I want to see you grow in your faith at the same time because the two things do go hand in hand. And I know this. Working together,
we can master your finances from that Christian perspective. So as I always end this show, I want to encourage you tonight, stay financially savvy and may God bless you abundantly.

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