My Blog

Rent vs. Buy?

4/15/2014

The age old question... Can I afford to buy a houes or should I contintue to rent?

So start off with the basic information you need. 

  • How much do you currently pay in rent?
  • How much house can I afford?
  • What kind of interest rate can I get on a Mortgage?
  • How long would I live in this house?

The first one should be easy.  The second one can be tricky.  If you don't know how much house you can afford, you can read my post here.  It will help you to get a ball park idea of what you can afford.  If you don't like crunching numbers, shoot me a text or email and I will put you in contact with a good mortgage lender who will do the job in a few minutes over the phone!

The last question is going to be different for everyone.  It depends on what stage of life you are, whether you will get relocated for work and a million other things, so you kind of have to make an educated guess for yourself.  The National Association of Builders found that the average first time homeowner lives in thier home for 13 years.  Non first time homeowners were found to live in their home for an average of 16 years.

Here is a simple calculator from trulia that you can use to compare the cost of renting versus buying

http://www.trulia.com/rent_vs_buy/

When you figure out your target home price, you can look for homes in your target area and price range on my website charlottecourtney.com.

Call/Text me at 563.249.9170 or email me at charlotte@melfosterco.com if you have any questions!

How much house can I afford?

4/14/2014

A few things you need to know to figure out home much house you can afford:

  • How much money do I make a year?
  • How much money do I pay on credit cards, auto loans, student loans, child support, etc. each month?
  • What is my credit score?
  • How much money have I saved up for a down payment?

These are the basic numbers that you need to know to start to figure out how much home you can afford.

A general rule of thumb is that you can afford a home three times your annual income.  So if you make $60,000/year you could afford a $180,000 home.  Of course each case is different and it is best to speak with your local mortgage lender first.  Call or text me if you want me to refer you to a good one! 

When the mortgage company goes to determine the amount of money they will loan you, the will look at two very important numbers.

  1. Your mortgage (Principal and Interest), taxes and insurance should be less than 28% of your annual income.  In this case, your monthly maximum would be $5,000, thus 28% would be $1,400.  Average annual taxes are $3,500 and annual insurance is about $500.  To be safe, lets assume this breaks down to about $350/month.  So the maximum mortgage you could pay every month would be $1,050.
  2. The total amount calculated above plus any montly credit card payments, car loan payments, child support payments, student loan payments or anything else that would show up on your credit report should be less than 36% of your annual income.  In this case, your montly maximum would be $1,800.

Your credit score (which is likely better than you expect) and the amount of money you have available for a down payment is important, because it influences the interest rate you will get.

This calculator from CNN will help you figure out how much house you can afford.

When you figure out how much house you can afford check out what is availabe in your local area on my website.  Happy House Hunting!

Call/Text me at 563.249.9170 or email me at charlotte@melfosterco.com with any questions.  

 

 

What is my home worth?

3/12/2014

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Test Blog

12/11/2013

I love to help people buy and sell their homes!

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