Real estate Tips

"How much house am I able to afford?" Have you ever asked yourself question and are you still asking yourself about it? Well, I’ve got the answer.

There isn’t any magic dollar sum that you should be looking for involving the "perfect house". How much house you can afford is as special as you are; it’s based on numerous things, including where you are, income, savings, personal needs, and most importantly, the house-buying plan you have put together.

The perfect way to buy a house is the 100 percent-down plan. Sounds weird, isn’t it?! But consider how much fun that would be! Don’t borrow money. End of discussion. If I can’t get you to postpone the purchase that long, I very much suggest that you start saving a down payment of 20% or more, select a 15-year (or shorter) fixed-rate mortgage, and fix your monthly payment to twenty-five percent or less of your monthly net income.

You want your brand new house to be a blessing, not a bane. If you buy a home with no down payment and a sizable monthly payment, you’re asking Murphy to move into the guest room. You do NOT want Murphy in your home – believe me! Slow down a little and realistically carefully consider everything before you get in head-first into making this huge purchase. If you fail to do so, you’ll simply be giving Murphy an open invitation to take over your home.

Here’s a quick checklist of important questions you need to go over as you consider how much house you you will be able to afford. If you are unable to answer YES to these questions regarding the house you want to own, then it’s not a smart move to purchase it now.

- Will I be able to make a minimum of ten percent (preferably 20 percent) down payment?

- Will I be able to keep house payments at or less than twenty-five percent of my monthly take-home income?

- Will I be able to afford to apply for a fifteen-year fixed-rate loan?

- Am I working closely with a house agent I can be confident with?

Good luck house-hunting!