As many Americans rearrange their lives due to the threat or execution of home foreclosure, most Americans are forced to take a better look at our financial practices.
Banks are holding tighter to their money. Lenders are looking closer at borrowers’ credit histories, assets, employment histories and overall ability to repay debt. The federal government is doing the same thing to banks. We’re all checking each other out. Now is the time for you to evaluate your own financial scenario and decide just what you can really afford to buy.
Take off the rose-colored glasses. Let’s look at this realistically. Why not let us help you analyze your current financial situation? We’ll help you determine just how much you can afford to pay for housing-related costs each month. We’ll also help you determine how much you should be willing to pay for a home. If you’re not quite ready, but know you want to buy a home in the future, we can help you take steps toward your next home purchase.
Even though homes are essentially on sale right now, this is no time to abandon all reason and take on a debt you can’t really afford. The real estate market - like every other financial market in the world - is fickle. we encourage only good, sound, sustainable investments for solid buyers.
How much home can you afford?
There are many different lending programs for homebuyers today. As the country goes through a recovery period, credit will be tight for awhile and a loan will be harder for some people to get. However, home loans are absolutely still available and lenders are eager to help people buy properties.
Check Your Credit
When you begin shopping for a home loan, check your credit report for any potential problem areas. Your ability to get a home loan and the interest rate you pay will be directly impacted by your credit score.
Federal law entitles you to one free credit report from each agency per year. Get your free reports at www.annualcreditreport.com or contact one of the following agencies:
Debt-to-Income Ratio Important
In general, lenders want to see a total 41 to 45 percent debt-to-income ratio including your housing expenses. Housing expenses include the cost of private mortgage insurance (PMI) if your down payment is less than 20 percent as well as taxes and homeowners insurance.
Make a list comparing your debt and income when you first start shopping for a home loan. How much do you think you can you comfortably afford to pay on a home loan? Never hide expenses that don’t show up on your credit report. False reporting when applying for a home loan could lead to foreclosure on your home loan. When researching the cost of your home loan, ask about:
- required down payment
- monthly loan payment
- home loan term
- type of home loan
- interest rate and type of rate, fixed or variable
- annual percentage rate taking into account points, broker fees and other credit charges
- points quoted as a dollar amount instead of just the number of points
- Fees including:
- home loan origination fees
- underwriting fees
- broker fees
- home loan transaction, settlement and closing costs
In order to calculate about how much home you can buy, visitour website’s handy Mortgage Calculator located on the full details page of each property listing. Try different scenarios to calculate and recalculate the total price you can afford to pay for a home.
We list homes in every price range. You can search for homes on our website right now. You can even set your own search criteria to ensure you are looking at all of the properties within your price range! We are here to help.