Finding and purchasing a home that will meet your needs now and in the years to come is a significant and often stressful time. At Coldwell Banker our goal is to make this transition as smooth as possible. Here are some tips that you may follow to make the search of finding your dream home seamless.
Before you start looking for a home you should ask yourself a few questions:
Here are a few tips to help you get organized:
How much house can you afford?
Simply put, you can afford a house that costs as much as the largest monthly mortgage payment you qualify for.
A quick way to estimate the size of mortgage you qualify for is to take your gross monthly income (that’s before taxes and other deductions) and multiply it by .28. This works out to just over 1/4 of your gross income.
Mortgage companies use something called qualifying ratios to determine how much they will lend you. Most mortgage companies use either a 28/36 ratio or a 25/33 ratio. The first number in each pair is the percentage of your gross income that the lender would consider acceptable as a monthly mortgage payment (i.e. if you make $3,000 per month, 28% of that is $840 per month).
The second number in each pair is used when all debt payments are considered, not just the mortgage. (i.e. if you make $3,000 per month, but also have a $250 a month car payment, 36% of $3,000 is $1,080, minus the $250 car payment equals $830).
As you can see, in this example the numbers work out to be almost the same. Obviously if you have more debt you would qualify for less.
Note: If an income or expense field does not apply to you, please leave it blank. All dollar figures should be entered in a monthly time period (i.e. if you earn $48,000 a year, place 4000 in the Salary field). This utility will give you an estimated mortgage payment you will qualify for. Note: The purpose of this information is to serve as a useful guide. For more exact, personalized information, please contact a certified mortgage representative.
Why you should work with a Realtor®
Working with a professional Realtor to buy your home is a good idea for several reasons:
Choosing a Realtor®
Searching for your dream home can be a time-consuming experience. Working with a professional Realtor will make the process much more efficient.
Since most people spend a fair amount of time with their Realtor, it’s important to choose a Realtor you feel comfortable with, and one who is responsive to your needs. The following questions will help you decide if a particular Realtor is right for you: