What your should know before buying a home
Setting a Realistic Home Purchase Budget
It is important to know how much you can afford before you begin looking at homes to purchase. Talking with a real estate professional and getting pre-approved for a loan puts you in a stronger negotiating position.
When you are working with a real estate agent to find a new home, the agent will probably ask a lot of questions about your income, liquid assets, and debt situation. The real estate agent needs such information to help you determine your price range.
Whether you are buying your first home, or moving up, your agent can give you solid advice on how to maximize your buying power. With so many mortgage alternatives available, you may find that you can buy more than you thought. Your individual situation might make some types of mortgages or financing more of a risk than you really want to take. Your real estate agent can help you determine if this is the best type of mortgage for you and help you make basic calculations. Each buyer's situation is unique, and real estate agents understand the importance of finding you the perfect home and the perfect financing to enable you to afford it. You should also keep in mind that buying at the top end of your price range gives you more time to outgrow your home, and can
save you money over the long term.
As a rule, your monthly housing costs should not be more than 28% of your monthly pre-tax income. These costs include the mortgage payment, real estate taxes, and insurance. If you have long-term debts, such as student loans or car payments, your monthly payments, including your housing costs, should be less than 36% of your pre-tax monthly income.
Mortgage Caclulator
