305-213-422
Can I Be a Home Owner
How Much Can I Afford ?
Determining your ability to comfortably pay monthly mortgage payments is something for which lenders will use established guidelines. A general rule is that a household's mortgage payment should not exceed 36 percent of its income on all its debt, which includes the monthly mortgage payment; and that the mortgage itself should not exceed 28 percent of the household income.
Remember, if you are purchasing a home with a spouse or other partner, you can include that person's income (and, of course, consider his or her debts) when computing the cost of the home you can afford. Mortgage calculators can be great tools when making these calculations.
Costs of Owning a Home
You should not purchase a home unless you feel comfortable that you can make the mortgage payments and be able to pay for other housing-related costs. These include upfront costs and ongoing costs.
Ongoing costs include your utilities, mortgage payment, property taxes, homeowner's insurance, maintenance and other expenses. Mortgage insurance may also be required by the lender if you don't have a big down payment.
Some additional housing costs to keep in mind when calculating moving expenses are furniture, appliances, lawn and garden equipment, or any repair work that may need to be done before you move in.
Upfront purchase costs include the down payment and costs related to closing and settling-in. You may qualify for assistance to cover some of your closing costs. Other programs may help you with your down payment or provide other assistance that will help you purchase a home.
Getting pre-qualified for a loan
Pre-qualification for a loan can help you concentrate on a specific price range, and save you time so you won't be looking at properties well over what you can afford to purchase. Pre-qualification is essentially an estimate of how much you can afford to spend on a house. You would typically take the step of getting pre-qualified sometime before you begin your search, and before your actual loan application meeting.
An additional step you may take is to get pre-approval for a mortgage loan. That means that your loan application has actually been processed by a lender, and a specific mortgage amount has been approved for you. Some buyers feel they have more negotiating power when they can provide this pre-approval proof to the seller. As with pre-qualification, lenders will use established guidelines to determine the size of your loan approval.
Francina Pavan
Broker Associate
Cell 305.213.4228
Luxury Real Estate Specialist
Email: listingmiami@gmail.com
