Real Estate Search Direct

A lot of people who are interested in buying a house get stuck when they come to the point: “I want to buy a new house. How much can I afford?“

Do you know how much you can afford on a home?  Do you know how to determine how much you can afford? 

There are actually two components to figuring out how much you can afford.  First of all, you need to  know how much money you can afford to pay at closing.  This will consist of two parts:  the down payment, and the closing costs.

The down payment is what you will actually pay towards the purchase price of the home.  In the current credit environment, it is unlikely that you can get a 0% down loan unless you qualify for VA benefits.  The lender will want to see that you have some of your own money invested in the home so you will be less likely to default on the loan.

Closing costs consist of various fees and expenses involved in the purchase transaction.  Many of the closing costs are fees charged by the lender.  There are also title insurance, escrow or attorney fees, taxes and transfer fees.  But can you get someone else to pay your closing costs?

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Comments (0) May 28 2009

That’s exactly what Ivana Newhouse asked the mortgage broker,  “I want to buy a new house – how much can I afford?” 

Ivana was planning to buy a house with her fiancé, Homer Buyer.  She wanted to start looking at properties right away, but there were so many on the market.  She wanted to find out how what she could afford to buy. 

When she gave the broker information on their income, cash for a down payment, debts and credit scores the broker came up with a figure of $480,000.  Ivana was very pleased with that number.

But then she asked what the monthly payment would be for a $480,000 house.  He told her it was about $2500.  Ivana didn’t understand this.  She had sat down with Homer the night before and they had made a budget.  Their budget only allocated $2000 for a mortgage payment.

She asked the mortgage broker, “How did you come up with those figures?”

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Comments (0) Apr 03 2009

“I want to buy a new house – how much can I afford?”

This is a question on many first time home buyer’s minds.  Ivana Newhouse was in the same situation.

Once her fiancé, Homer, convinced her that they should own a home together when they got married, Ivana started looking at properties for sale.  But she didn’t know whether or not she could afford what she was looking at.

Ivana didn’t want to waste her time looking at properties she could not afford.  She also didn’t want to settle for something that didn’t fulfill her wants and needs if she could afford  something better.

She decided that figuring out their affordable price range was the first step in their search.

Ivana went to see Homer and asked him to work with her to determine what they could afford.

They came up with the following steps to determine their price range.

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Comments (1) Mar 17 2009