 |
 Bandon Home |
Buyer Tools |
Bandon Info |
Sellers Tools |
About |
 |
 |
OREGON REAL ESTATE AGENCY DISCLOSURE PAMPHLET |
How Much House Can You Afford?Take the time to examine your finances and determine how much you can afford for down and monthly payments. Before you start looking at houses -- review your financial situation to determine what you can pay down and how large a monthly payment you can handle comfortably. You'll need this information when it's time to sit down with your lender anyway.
If you know what you can afford comfortably for monthly payments, you can then determine how much house you can afford. If you want your monthly obligation to stay under $1000 per month with a 30 year mortgage at 6%, that will allow for a $160,000 home. Remember, the more you are able to put down in the beginning the more home you will be able to afford. Interest rates will vary widely depending on your area and the type of loan you can qualify for. Also, you can avoid some monthly costs such as Private Mortgage Insurance if you are able to finance less than 80% of the current value of the home.
If you don't have a net-worth statement already, it's time to put one together. That inventory of your assets and liabilities will help you to determine the maximum down payment you can make. If money you will need is tied up in illiquid assets such as your current home, land or collectibles, you must allow yourself plenty of time either to sell or to borrow against them.
From your total liquid net worth, subtract:
The bottom line will be the sum that you could put down on the new house, if you wished to use it all. The more cash you pay up front, the less you will have to pay month by month on the mortgage, and the lower your total interest costs will be. Conversely, the less you put down, the greater will be your leverage, tax deductions for mortgage interest, and available funds for other expenses, including decorating and furnishing. You'll also want to look at your spending habits to figure out how the new house payment will figure into your budget. Don't forget you will be required to have insurance on your home as well as pay property taxes.
|
|
Terms of Use
|
Privacy Policy
|
Site Map
|
Client Login
|
|
|