Did you know that there is a very real possibility that you can actually own a home for less than what you're paying in rent?
You may hear people say buying a home will help you pay less in taxes. That and so many other benefits are reason enough to look at the steps to homeownership and using your VA benefits.
First foremost, lets take a look at your comfort levels for a monthly payment.
A simple way to determine how much of a mortgage payment you can afford is to draft a simple monthly budget.
1. List your monthly income from all sources. That total is your "gross" monthly income.
2. Subtract from your gross income any taxes you pay or owe monthly - Federal taxes, state taxes, FICA (social security taxes), and Medicare taxes. Don't forget to include the monthly amount of any estimated taxes you have to pay. What is left is your "net" income.
3. Next list your other monthly expenses, such as savings, utilities, groceries, insurance, car payments, tuition, clothing, entertainment, etc. (If some are payable yearly or quarterly, divide the amounts by 12 or 4 and add that to the monthly expenses.) Do not include current rent or housing payments, since those would no longer be applicable.
4. Subtract the total of your monthly expenses from your net income. The resulting amount is what is left for a house payment.
Of course, you can always adjust your discretionary spending to leave more for a house payment. Just be sure to be realistic if you do that. An unrealistic budget can leave you in a financial bind when reality sets in. (Can you really get by with only $200 a month to feed your family of four? Probably not! Make sure your numbers make sense for your family.)
SO WHAT DO YOU DO NEXT?
You may have heard the term pre-approved or pre-qualified. In the real-estate industry we do things a little backwards. Here is a very common scenario:
You the buyer decide you want to move. You call a realtor and start looking for a home. Finally, you find the home of your dreams and the seller accepts your offer. Of course you will want to do a home inspection to make sure there is nothing wrong with your new home. The cost of a home inspection is generally $200-$300 and is paid at the time the inspection is done.
Next, you will need to go to a lender and get a mortgage. At the mortgage application you may by required to pay approximately $450 for an appraisal and credit report. If your loan is rejected you have now LOST that money because those fees are not refundable.
BUT THERE IS A SOLUTION
You can get pre-approved BEFORE you even go looking for a home. By being pre-approved you will know that your loan is already waiting for you and all you have to do is find your perfect home. You will also know how much you need to buy the home and what your monthly payment will be.
READY TO GET STARTED?
Call us today to schedule a FREE 1 HOUR CONSULTATION and get the process started.
During this meeting we will discuss the mortgage programs that will best meet your needs. We will also try to make this program fit your needs and comfort level for a monthly payment and the amount you want to use to purchase your new home.
What you will know when we're done:
- How much you can spend for a home
- How much money you will need to close
- If you need to consolidate your debts
- If your credit is good enough and if not, what steps you need to take.
- The best mortgage for you and your family
- Should you buy or build a home
- How much money you are actually saving by owning instead of renting
How to Buy a Home with a VA Loan was originally written by Louise Thaxton and posted on Military Mortgage Specialists.