I am a very big fan of Money Queen Suze Orman. On one of her recent shows, she had a wonderful idea about figuring out how much home can a new buyer afford. Today I'm going to give you the tools to figure that out by "Playing House."
Step #1
* Choose how much home you want to buy.
* Only start this process if you have 20% down on this home of your choice.
* Go online and use a mortgage calculator and online resources to figure out the following monthly expenses:
1. 30-year fixed rate monthly mortgage payment
2. Monthly Property taxes
3. Monthly Association Fees, (If it's a Condo, Mobile Home or PUD)
4. Monthly Home Owners Insurance
5. Monthly Home Maintenance (Yard, Periodic Painting, Termite Repairs, Roof, etc.)
*Total up all the costs for items 1-5, under step #1, and this will give you the total monthly cost of owning the home.
Step #2
* Use your total at the end of Step #1 and subtract it from the monthly rent you currently pay. This will give you the additional amount you currently would have to pay for a home of this price.
Step #3
* Start saving the additional amount you figured out at in Step #2 for 6 months.
* This will help you see what it feels like to own your own home.
* If this amount is too difficult, then you are purchasing too much house.
* If it's easy, you now have 6 months of saving to use towards your closing costs and down payment and you should call your favorite realtor, me, to begin your home search.
I hope this was helpful! This will also help you see if renting is comparable to the monthly cost of buying a home in this current market. Please comment below to give me feedback on this blog post.
 | "A Realtor that knows homes." Traci Ferguson 805-235-6396 traci@traciferguson.com http://www.traciferguson.com License #01875751, ecoBroker #16082 |
I was in this market since two years. I got many customers who are newbie in this market and they doesn't have any enough knowledge about the property. So, This information is very beneficial for everyone.
ReplyDeletestudent accommodation Sheffield
Thank you Michelle, new buyers need a ton of help to get them on track to making good decisions. Knowledge is Power!
DeleteIt is certainly important to assess your job stability and financial status and see how much mortgage you can really afford to pay back on an ongoing basis. If your mortgage payments are going up faster than your income, you're just going to rack up a bigger debt.
ReplyDeleteRegards,
Chris from 123homeloans.co.za
So true Chris... Affordability is key to buying a home and being able to keep it for the long haul.
Delete