Tip 5 - Determine How Much House You Can Afford

Dated: April 6 2022

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Tip #5 – Determine How Much House You Can Afford

Now that we have discussed the Home-Buying Process, let's look at how to determine the price of home you can afford.

Before you get emotionally attached to a beautiful house, check your monthly budget to determine how much house you can afford. You need to leave room in your budget for other things, so make sure your monthly housing costs (including HOA fees [if applicable], utilities, taxes, insurance, home warranty, etc.) are roughly 25% of your monthly take-home pay.

There are numerous mortgage calculators out there, which are good to ballpark the cost of a loan. But no calculator will be nearly as accurate in capturing all housing costs involved as the resources that REALTORS® and lenders have access to.

Keep in mind that online mortgage calculators will not typically capture the full picture of what your monthly housing costs will be.

If you'd like to run specific numbers taliored to your situation, you can contact me at any time (via phone, text, or email) to quickly get a full picture of what your monthly housing costs would be.

Understanding Additional Monthly Housing Costs

HOA fees - An HOA (Homeowners Association) is an organization in a subdivision, planned community or condominium that makes and enforces rules for the properties and their residents. Those who purchase property within an HOA's jurisdiction automatically become members and are required to pay dues, known as HOA fees. 

Utilities - These include (but aren't limited to) your electricity, natural gas, water, garbage pickup and sewer service.

Taxes - Collected property taxes are used by the governing body of the jurisdiction where the property is located. This money funds education, road and highway construction, public servants, and other services that benefit the community. Property tax rates vary by jurisdiction.

Insurance - Standard homeowners' insurance safeguards your home from a multitude of hazards, including wind damage, fire, vandalism, tornadoes, hurricanes, and thunderstorms. Homeowners' insurance may be required when securing a mortgage to protect the mortgage company when making a financial investment in your home.

Home Warranty - A home warranty is a one-year service contract that covers repairs and replacements of most major home appliances and system components due to failure, standard usage, and other problems that happen due to age. Although never a requirement to have, a home warranty may be a great option to obtain to protect you from having to pay large expenses if a system/appliance breaks down.

My next tip will cover Saving for a Down Payment and Closing Costs! As always, feel free to reach out to me at any point if you have questions about any of the content covered here.

Brandon Schweers

REALTOR®️

972-528-0068

BrandonS@TheTomlinTeam.com

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Brandon Schweers

Brandon is a Dallas native that considers himself blessed to be serving clients across DFW in their search for real estate property. Real Estate has offered Brandon a career he never knew he always wa....

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