CAN I AFFORD TO BUY A HOME NOW?
HOW MUCH CAN I AFFORD?
CAN I AFFORD TO PASS UP THE LOW HOME PRICES?
Many people don’t know were to start when purchasing a new home. Can you afford to buy a home at all?, how much can you afford?, do you have enough money for a down payment, closing costs, moving expenses, and other home bills? With the lowered housing market, now is the perfect time to figure out what you can afford. Below is a general guideline you can refer to. We urge you to contact our Realtors and Lenders to help you figure out your specific situation.
Generally, your annual gross income multiplied by 2.5 will give you an approximate amount for the price of home you can afford. This amount will vary depending on how much of a down payment you have, your credit score, your debts, and financial situation. All debts, including liens, child support and alimony, should not exceed 30%-40% of your gross income.
Down Payment: Your down payment is a percentage of the purchase price of the home. This amount can range from 3% to 20% or more if the buyer wants to lower their loan amount. This amount will vary depending on the type of loan you qualify for.
Closing Costs: Closing costs are fees charged, in addition to your down payment, to purchase a home. These fees include financing fees, title insurance, taxes, escrow items, homeowner insurance, etc. These fees can range from 1% to 7% of the purchase price depending how the offer is written. You will receive an estimate of these costs prior to closing.