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Archive for the ‘Home Prices’ Category
How Much Mortgage Can I Afford?
Calculating how much you can afford on a home mortgage is a lot more complex than calculating how much you can afford in rent. In the latter case, a third of your income is usually a good measure for the most you want to pay in rent. Where a mortgage is concerned, you have to take some other considerations into account when you’re shopping around for houses.
Property Taxes
The amount you pay to finance the cost of the house is only the first part of determining how much the mortgage will actually cost you. You’ll also have to take into account the cost of property taxes in the area where you’re buying. Because this is an unavoidable expense, you have to factor it in from the start. If you don’t, you’ll almost certainly underestimate the costs you’ll pay each month.
Take the yearly taxes on the property and add a 12th of that sum to your monthly payments as most people pay this monthly via their escrow account. That way you avoid paying a large sum at one time each year to satisfy your property tax bill.
Homeowners, Flood & Mortgage Insurance
Homeowner’s insurance will be a necessity, as well. You’ll have to factor this into the cost of your home every month. Remember not to go by an average in this case. The homeowner’s insurance could be much more expensive if you live in an area that’s prone to flooding or to fires. This could vary by the neighborhood, so be sure that you’re making a good estimate of what you’ll have to pay.
Unless you show up with a very large down payment, you’ll also need mortgage insurance. This protects the lender from taking all of the risk if you should happen to default on the loan. You’ll have to factor this into the total cost of the mortgage, as well. Make sure your mortgage loan officer can explain this to you and make sure you understand the amount you’ll have to pay.
Debt to Income Ratios
Generally speaking, your mortgage should cost you somewhere between 28 and 33% of your gross monthly income. This cost has to include all the aforementioned expenses, as well as any others that may exist, such as neighborhood association fees and so forth.
The mortgage loan officers at NOLA Lending will be able to help you find a suitable loan that fits your income. One of the things that caused the housing crises was people buying way more than they could realistically afford. If you make smart decisions and buy within your means, a mortgage can be an affordable form of financing that offers you a lot of joy for the amount you pay every month.
Please contact us to assist you in calculating your estimated monthly payments!
Important Things to Remember when Shopping for a New Home
When you are shopping for a new home, it is important that you keep a few things in mind. The following are some of the things that you need to remember when you are on the hunt for a new place to hang your hat.
The Location
Of course, the location is going to be very important. The price of real estate varies in different areas, and you want to make sure that you are in an area that offers you the most convenience. Whether you are looking for a place that has great schools for your children, or you want a place that is close to your work, this can be one of the most important factors in buying a new home
The Price
While everyone knows that it is important to know the price of a home before buying, you might know about the price ceiling. This is the highest price of all homes in the area, and you want to make sure that you buy a home that is well below the ceiling. This way, you will be able to maximize your profit if you ever decide that you are looking to sell.
Your Finances
Before you go shopping for a home, you should get pre-qualified from a mortgage lender (link to home page) and know exactly what you can afford. This will help narrow your search and keep the heartache to a minimum if you should happen to fall in love with a home then later you find out the home is out of your price range.
The Hidden Costs of Repair
Even if you want to buy a house that needs some fixing up, you need to consider just how much that is going to cost you. In some cases, you might be able to find another home in the area that doesn’t require as much work and that will be able to save you some money in the long run.
Hidden Flaws
These are things that you might not notice when you first look at the home. More than likely, you are going to be looking at all of the things in the house that you like, and you might overlook a few big problems. For example, consider the driveway. Is it too steep? It is large enough to allow more than one vehicle? Will getting out of the driveway be a problem? Another flaw that might not have anything to do with the house is the neighbors. Are the neighboring homes in bad shape and do they devalue the property? Are the neighbors loud or rude?
While these things might take some time to determine, it is in your best interest to know as much as possible about the house and area before you look for a loan.
