If you’re in the market for a new home, investment property, refinance or just looking to renovate - one of the first questions you’ll probably ask yourself is, “What can we afford?”. We have seen and talked to numerous buyers that become so caught up in how much they can afford that they don’t realize their total buying power! If you are wondering what that is, it is the total amount of purchasing potential that you actually have after bills and other expenses.
Why Home Buyer Power MATTERS?
A common misunderstanding we often see is that consumers think that a home’s list price determines whether or not they can purchase it. Don't get us wrong, it IS important to look at the price tag! Seeing your estimated monthly payment is more essential in our opinion. After all, the price tag doesn’t include the housing-related expenses, such as property taxes, homeowner insurance, any associated monthly fees and any maintenance or repairs you may have. Having your lender figure out the payment will prevent you from over/under-estimating your home buying power. After all, you’ll live with your monthly payment, not the sales price.
Once you have clear understanding of your home buying power, you’ll be able to buy the home you want! Not settle for a home because you felt it was the only one you can afford. Knowing your buying power will also help you from becoming “house poor". This is a term for someone large amount of his/her total income on home ownership (including mortgage payments, property taxes, maintenance, and utilities) and not having much left over.
Reading this, you are taking one of the first steps in the home buying process, which is to consult with a mortgage lender about your financing options. Enter your information to start the prequalifaction process and we will set you up with one of preferred lenders that best fits your needs: