First Time Home Buyer Guide
First Time Home Buyers Guide: How Much Home Can You Afford
Step 1: Get Pre-Approved
The only way to truly know how much home you can afford is to ask a lender. Getting pre-approved lets you know how much you can afford before shopping for your home.
What to Know and Where to Find It:
• Income: Stable income assures a lender you can make your monthly mortgage payment.
• Debt: Add up auto payments, credit card payments, student loans, alimony, child support, and other.
• Cash: Total assets, amount in checking and savings accounts, and other investments.
Step 2: Determine Monthly Mortgage Payment Including Escrow
Escrow is a third party account used to retain funds, including the property owner’s real estate taxes and hazard insurance premiums.
Step 3: Understand Bills Associated with Home ownership
Estimate that it will cost about one percent of the purchase price per year to maintain your home. For a $200,000 home, you should budget approximately $2,000 per year or approximately $170 per month for maintenance. Condominiums and co-ops will have regular maintenance fees. You will also have utilities, gas, electric, water, sewage, cable, telephone, insurance, property tax, etc.
Step 4: Compare the Total Costs to Your Monthly Salary
Subtract the total in Step 3 from your monthly gross
Step 5: Test those Numbers for Six Months
• Set up a new bank account.
• Subtract your current monthly rent from your Step 2 total.
• Deposit the difference in these numbers into the new bank account on the first day of each month.
• After six months, determine how simple or straining the process turned out to be.
Step 6: Establish Future Priorities and Plan for the Unexpected
• What are your needs for the new home—appliances, furniture, lawn equipment?
• Is a new car in your near future?
• Do you plan to have children?
• How long can you survive if you lost your job?
*Provided by The Nichols Lending Team
The data relating to real estate for sale on this website appears in part through the BRIGHT Internet Data Exchange program, a voluntary cooperative exchange of property listing data between licensed real estate brokerage firms in which Charline Francis, Realtor participates, and is provided by BRIGHT through a licensing agreement. The information provided by this website is for the personal, non-commercial use of consumers and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Real estate listings held by brokerage firms other than Charline Francis, Realtor are marked with the IDX icon and detailed information about each listing includes the name of the listing broker.
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Data last updated: Jun 20, 2019 5:04:pm.