Blog Posts

How Much Can You Afford?

Edgar Melo Feb-11-14 01:11 PM

 

The market has begun early.  Things are heating up as there isn't much inventory.  When buying how will this affect you?  So the critical thing one must ask is: How much can I afford?

 

Why is it so important to know how much you can afford to spend on a home?  There are many reason, but the key 2 reason are:

  1. You dont' want to buy a home and then find out you can't afford then needing to sell it under stressful conditions.
  2. Don't settle for a property that isn't ideal when yo ucould afford your dream home

Having a budget in place is very important.  Understanding what all your covering costs will be including car payment, loans, credit card payments, utilities, taxes and so forth will play a crtical role on how much you can afford.

So how do you figure out how much you can afford to pay for your next home?

The first step is to talk to a good REALTOR®. He or she will help you gain a clearer understanding of how much your current home will likely sell for in today’s market. That amount, together with other financial resources you might have (such as savings), will determine your down payment.

The next thing you’ll need to figure out is your mortgage. Your REALTOR® can help you find a lender who will take a variety of factors into account – income, credit rating, debts, expected down payment, etc. – to calculate the maximum amount of mortgage for which you qualify.

Say, through the proceeds of the sale of your home combined with your savings, your expected down payment is $100,000. If the lender authorizes a mortgage of $250,000, then you can afford a $350,000 home.

Of course, that doesn’t mean you’ll need to spend that much. In fact, a home that meets your needs in terms of property type, features, and neighbourhood, may in fact cost you less.

One thing is for sure. A good REALTOR® can work with whatever amount you can afford and show you homes on the market that most closely meet your needs.

Looking to sell or buy?  Call upon our award winning TEAM and see why we will always strive to give you the utmost of service.  We will NEVER disappoint you.  There is no BS with us and we say it the way it is.  If I would not do the deal for me I will NOT do it for you!  Will you join our family?