Mortgage rates are so low!! Have you considered buying a new home? If you are not sure what you can afford – check out this article that’s full of resources to help you buy a new home!
If you read my most recent post about my 2021 New Years Resolution, you would have had a brief overview of our year.
After living in Mexico City and Kentucky for 17 years, we have moved back home to Florida. It’s really something we never planned to do, but sometimes all the pieces fall together fast and you just go with it!
So this year, we have sold our home and bought a new home. Of course, your new home budget always correlates with your monthly budget. But with interests rates as low as they have been, you are able to afford more house for the same payment.
This process also made me decide to get my real estate license in 2021! I love everything that comes with buying and selling a new home, so it’s a good fit for me – especially since I am back in my hometown!
When you first start thinking about buying a new home, you need to know what you can afford. You can base it on what you currently pay but eventually, you will need to get a pre-approval to make it easier to make an offer on a house.
How do I know how much of a mortgage payment I can afford?
I have a really great resource for you to help you see how much a house will cost you per month based on your downpayment (which can be as low as $0), local taxes, the mortgage principle, and interest. You will also need to factor in house insurance.
MortgageCalculators.info has a few resources that will help you in your home buying journey!
What is the monthly mortgage payment?
You need a Mortgage Calculator! This basic calculator quickly figures the principal and interest payments on a fixed-rate loan. If you would like to calculate all-in payments with other factors like PMI, homeowners insurance, property taxes, points, and HOA fees use the advanced calculator.
How Much Income do I Need to Earn to Buy a Home?
Would you like to have some idea about how much you could get approved for based on your income? Use this free tool to see your minimum required income.
How much house can I afford?
Your debt plays a large part in how much a bank will lend you to buy a home. If you have a lot of credit card debt and high car payments, it could affect the amount a bank will lend you to buy a home. You can click here to find out your debt to income ratio.
After you know your debt to income ratio you can use this mortgage affordability calculator to see how much you could get a loan for.
Home Buying Tips:
Never open a new credit card or buy a new car while you are purchasing a home. This will affect your credit and it could cause you to not get final approval on a loan.
If you are putting down less than 20% for your down payment, you will have to pay PMI – this is an insurance policy that protects the lender in case your home goes into foreclosure.
Over the years you will stop paying the PMI because you will build equity in your home. Once you hit 20% equity, your bank should stop collecting PMI.
This does not happen if you have an FDA loan – you will have to pay the PMI for the life of the loan or until you refinance your home.
It’s never too soon to prepare your family to buy a home. Get out of debt, save money for a down payment (but not necessary), and look into what you can qualify for based on your income. Many times you can pay less for a mortgage payment vs renting an apartment or house.
A home is the best investment you can make! Don’t wait until you can afford your dream home – buy something that works for your family now, build equity, and sell it to upsize your home to continue to meet your family’s needs and your budget!