How much should you spend on your upcoming home purchase? There are guidelines that determine what mortgage amount a buyer can qualify for. To make that determination, you should contact a lender. I'm not qualified to make that determination. However, once you are told how much you qualify for, should you actually spend that amount? Maybe yes. Maybe no! As your buyer's agent, I would recommend that you consider many things...in particular, your lifestyle. What are you comfortable with as far as a monthly payment?
No formula factors in the things you enjoy doing. How often do you like to eat out? Go to the movies? Take a vacation? Are you a clotheshorse? What are your hobbies? Do they take a bite out of your budget? Only you can answer these questions and only you know what, if any, changes you are willing to make after you purchase your new home.
I like to see people be able to purchase the home of their dreams and enjoy it...not be a slave to the house payment. So before you begin the search for your new home, contact a mortgage lender to see what you qualify for and what the monthly payment will be. Then determine based on your lifestyle, if you can afford that amount or if you need to buy less. After all, in today's world less is often more.
Interest rates are still low, but expected to rise. Down payment requirements are about to increase from 3 ½ % to 5% on FHA and allowed seller contributions will be limited on FHA loans to 3% (currently 6%). There are some great values on homes in addition to home buyer credits up to $8000 for qualified buyers. It is a great time to buy!
For help finding the home of your dreams that you can afford, pick up the phone and give me a call before it is too late.
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