How Much House Can You Afford

The answer to "How Much House Can You Afford" is what everyone must know before beginning a search for a new home.  In my business, many insist on starting the search by looking at a house they like.

Sounds good, but---Will you be able to obtain a mortgage to purchase it?  Do you have enough for a down payment based on your credit score? All questions that need to be answered before deciding to make an offer on a house.  The worst thing I can do is show you a house you cannot afford. 

The answers to these questions and others, including your work history and income, are necessary to determine the maximum amount of loan you can repay.  Banks do not like loaning money unless they have determined the borrower has an excellent chance to repay it.

So, where do you start when you decide your family needs a different home?

Step 1: Talk to A mortgage loan officer.  The loan officer will assess your financial situation and provide you with a price range in which you will most likely be approved. 

Loan options provide buyers with different levels of down payment based on their credit score.  The loan officer can explain each option and help you choose the one that fits your situation.

Step 2: Interview Real Estate Agents.  A real estate agent, who understands the community that you want to move to, is invaluable.  The agent will show you the  values in each neighborhood and make sure you do not pay more than the property is worth.  In addition, the agent will walk you through the transaction by showing you homes, negotiating a purchase agreement, scheduling inspections, assisting your loan officer, all the while explaining each step of the process - right up to the point where they hand you the keys to your new home.

Purchasing a house through a real estate agent does not cost the buyer anything in most cases. The agent will explain how commission is paid by the seller, unless there are extenuating circumstances, in which case you can incorporate that into the purchase agreement.

If you want to learn more about down payments and loan types, including the way a down payment is calculated, visit this link .  The site allows you to move the scale to your income level and explains loan options. This knowledge will help greatly as you begin.

Call me if you are considering a move.  We can discuss your options and suggest experts who can help you understand the entire process, making sure you are not putting yourself and family's future in jeopardy.

Terry Pauling is a Broker & REALTOR® at EXIT Realty North Star, 222 W Salem Ave. Indianola, IA 50125. We provide full-service real estate services to the Indianola, Warren County and Des Moines, Iowa metro areas. Find Links and contact information for Terry at www.exititown.com.   (C) 515-249-9192 

To download my mobile business card Text:  EXITitown   To: 85377

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