Buying a
Home In Maryland, DC
or Virginia
How Much Home Can You Afford?
An Easy Guide. . .
!
How
much home
can you afford?
Most
buyers are often clue-less about the financial aspects of buying a
home, and if you are considering taking advantage of the present Real
Estate situation, you may have many questions unanswered. How much can
I afford? Do I need a large down payment?
What are my payments going to be? What interest rate? What is interest
rates?
To
begin with, if you are a first time home buyer, your home price range
will be determined by your income, credit history, the cash you have
for a down payment & closing costs.
Your
debt also plays a major role. How much you owe vs how much you make
will determine if you are credit worthy or a credit "taker".
After
you make an application with a loan officer, they will pull your credit
and the amount how much you earn will be also compared to how
much you owe. . this will determine how much the bank $$$ allows you to
borrow.
Complicated
enough?
Let's
try this way. .remember this is for GROSS INCOME
The
financial rule of thumb is as follows.. . . your total monthly debt,
which will include your monthly mortgage, should’t be more
than about 35 to 38% percent of your gross monthly income.
Most
experts agree with the above ratios and you more likely will not be
able to get a loan. .if you are hovering around the 40% plus
ratio.
Easy
Math. . If you make GROSS $1,000 per month.
Your
monthly total debt should not be no more than $380 per month..
.$400 tops
With
just $380 per month. .your house will be worth somewhere around below
$50,000 at today's rates.
To
live in the Washington
DC area including Maryland and Virginia
. .a $50,000 house
is like the loch ness monster. . . Some claim they have seen it. .but I
missed. From time to time a picture will emerge of a $50,000 home.
.usually is in black & white and kind of fuzzy.
Going
back to afford ability, naturally every situation is different, and
each lender has different rules about working with buyers. This will
control exactly how much a lender is willing to lend to
you.
Your
best bet is to surround yourself with professionals and start by
finding out how much home you can afford and then. . . .ONLY
THEN..start looking for your dream house.
But
please don't ask me to show you $50,000 homes walking distance to the White House
or Georgetown. . unless you supply the bodyguard.
Find Homes
For Sale in Maryland, DC and Virginia Here
FREE LIST
of FORECLOSURES for MD,DC and VA
Fernando
Herboso
Herboso & Associates
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