Buying a home can be a very exciting time! Whether it has been something you have been dreaming, planning and preparing for or whether it is something that has become a necessity, having a place that you can call your own is a special experience.
It’s easy to get caught up in the excitement before asking yourself the most important question of all: How much house can I afford? This should be the first step in preparing to become a homeowner. The hard truth is, it doesn’t matter if the kitchen is fabulous or the backyard is big. You have to have the peace of mind that you are able to pay the mortgage each month and have the reserves to maintain and fix things if necessary. Figuring out how much house you can afford doesn’t have to be rocket science. Here are some smart tips to help you buy a home within your budget.
#1. Start by calculating your total income and your total liabilities. Knowing exactly how much money you have to work with each month after your existing expenses is essential in getting started.
#2. Confirm how much of a down payment you are able to apply to a home purchase. This can be from many sources; savings, investments, gifts, etc. Knowing exactly how much cash you have available to apply will be a key component in know how much you are able to finance.
#3. Take a look at some online mortgage calculators. There are many websites that provide this tool. Although this will only provide you with a general guideline, it gives you some insight as to where you would stand on a monthly mortgage payment.
#4. Talk to a mortgage broker or local lender. This is the best way to know exactly where your specific circumstances will place you within mortgage lending guidelines taking into account your finances, credit rating, and current interest rates.
#5. Last, talk to your real estate agent. Many times they can help guide you to the right professionals to assist you with all of these items, as well as help you to find that dream home. Your real estate agent will work with you and your budget to ensure that you find the perfect home at the perfect price!
This is a great time to consider buying a home. Interest rates have once again dropped to new historical lows. If you are on the fence in trying to decide whether you are ready to buy or not, lets talk and find out if this is the right time for you to take advantage of the amazing opportunities these low interest rates provide.
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