How much do you think you can
afford per month is one of the first questions I ask a potential home
buyer,
then I tell them to subtract $200 from that. Usually, when
a first time home
buyer is looking at homes, they take their rent and add what ever extra
money
to that per month and that is how they come to their conclusion of what
they
can afford.
But, is that really what
you can afford per month? Prior to home ownership did
you rent an apartment or a home? If you rented an apartment, I promise
you your
expenses will go up! You will now have water, cable, garbage, and heck
even
your heating and cooling bill will go up, because you are more than
likely
heating a much larger area than you were renting. (Don’t forget home
owners
insurance!)
Now, if you were renting
a home, you need to calculate into your monthly budget
the taxes on any particular home, and in the Tigard area,
that can easily be
anywhere from $100 to $300 a month. Most online calculators don’t add
in the
taxes to your monthly payment.
If you are looking to buy
your 1st home, and need some advice on
how
much you can afford, please contact me and I will get you in contact
with a good
lender. They will give you the real numbers and what you need to expect
each
month and then you can decide for yourself if you really are ready to
buy a
home.
Palazzo Realty Group
Phone: (503)524-9494
Fax: (503)622-8739
©2009 Todd Clark - How much can you afford per month for your mortgage payment… Now subtract $200!
Provocative post!
Todd,
Excellent!
It doesn't matter what a buyer qualifies for if it exceeds there comfort zone!
Bill
I always make sure my buyer is fully qualified and that they obtain a payment that will not stretch them each month. Great post
Todd, a very good informative post for buyers.
Todd - Great minds think alike! I was thinking of writing the same post. No matter what price range my buyers qualify for from their lender, I always want to know the monthly payment that they are most comfortable with. There are very few who choose the top end of their qualified range. Having that information at the outset before we start looking at homes makes for a very relaxed and happy buyer.
Good point. And, to help offset that, you can point out the tax savings because of deductible interest and property taxes, so they can give themselves a raise courtesy of Uncle Sam.
Hi again Todd. I like your advice for first-time home buyers. Speaking to a lender can really help. ~ Lana
Todd, I have always cautioned buyers against borrowing what the lender tells them they can afford and follow my own advice as well. When we were buying our second home, the lender said we qualified for $200K. I looked at my husband and said "no way". We bought a home for $132K
Todd provides very good advice... if you are shopping for a home in his area, listen to him!
When I got my last mortgage, I had only been in real estate for about a year and so couldn't provide 2 yrs of tax returns to support my income claims. Luckily I had also been working part time for my family's business. I qualified for a mortgage using just the part time income (and I'm single, so no co-borrower). At the time I thought "Wow, if that's really the only money I was making there is NO WAY I would ever want a payment of this amount." It was really eye-opening as to just why there are so many foreclosures.
Great advice.
Todd
Great sound advice. People way out spend themselves these days. We see the repercussions like crazy because of it lately
Todd - This is where I think a lot of first time home buyer's get into trouble with their finances and over extend themselves.
I remember how tight it was my first year of home ownership, I thought I was going to have it easy because my payments were only about $100 more than my rent, but I didn't count on taxes, garbage, water and all the other little things. It was nice come tax time, but until then it was tough.