Countless times buyers just want to jump in the car with a Realtor and look and look and look at any and all houses that they "know" they can afford.
But can you really?
Knowing your buying power before looking is the smartest thing a buyer can do when shopping for a home. You need to know how much a lender will loan you and at what terms. Based on the buying power the lender tells you, you need to know the TOTAL monthly payment including taxes and insurance and if you are comfortable with that payment.
For example - I had a homebuyer that came to me and said they wanted to look in the $220,000 - $250,000 price range. After making them understand that they had to know if they could get a loan for that amount, they agreed to talk to my lender. The lender came back and said they were preapproved for $180,000 with $4,000 taxes. The buyer was surprised but happy that they hadn't wasted time looking in the wrong price range.
Interesting enough was when my buyer heard the monthly payment on a $180,000 loan with $4,000 taxes, they didn't want to go that high! So, working backwards, we came to the conclusion that they would be comfortable buying a $160,000 home.
Imagine wasting time looking in the $220,000 - $250,000 range when not only could they not afford it but they didn't want a payment over a $160,000 price tag!
Know your buying power BEFORE looking. It will save a lot of stress, time and energy knowing what you can afford. With my buyers, every home we walk in I can say "This house will cost you TOTAL $1,345.54 per month based on a October closing, asking for $4,000 in closing costs from the seller and you bringing $3,500 to the table." It saves so much time!
For all your real estate needs in Plainfield and Will County, call LaNita Cates with REMAX Realty of Joliet. As a resident of Plainfield for 15 years and an agent in the Will County area for 4 years, I can help you with all your home buying needs. Call me at 630-341-1545 today!
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