Even with all of the information available to us on the Internet these days, there are still some questions that Google just can’t answer. One of the first questions we hear whenever someone comes into the office or gives us a call is almost always “How do I know if I can afford a home?” It’s not an easy question to answer, but it is easy to start figuring it out.
Purchasing a home is a greater commitment than an impulse buy on Amazon.com and much more involved than securing a loan for your next car. The typical home mortgage, while it can be paid off early, is typically spread over a 15 or 30-year period. However, unlike buying a new car, most experts will tell you that the purchase of a home is a smart investment over the long term and in the short term, can help you financially through the equity you’ll build and tax incentives.
In order to decide what you can afford when purchasing your first home, you’ll need to start with a careful look at your finances to see how much money you can put as a down payment, along with what you can afford to pay each month. Keep in mind that you don’t want to be ‘house poor’ and have your payments so high that they stretch your finances to their limit.
To help you determine what you can afford, HomeBridge has a free mortgage calculator. Keep in mind that this is not a 100% accurate representation of what you may be able to afford. Later on in the process, after speaking with us, your tax advisor and other financial professionals, you’ll be able to better determine what you can afford, your payment structure and what type of mortgage works for your own personal situation. Not all mortgages are created equal, so it’s important that your Mortgage Loan Originator discuss with you all the different options suitable for your financial situation, the type of home you’re looking to buy and in some cases, your past or current military status.
When using the HomeBridge mortgage calculator, don’t be alarmed if the estimated cost of a mortgage payment is a little higher than your monthly rent. There are tax incentives and equity scenarios that come into play that benefit most home buyers. Again, buying a home is not an impulse buy and you should speak with your tax advisor or a financial professional to help determine what your cost savings may be versus renting and other ways the dream of home ownership can help your personal financial situation.
The HomeBridge Mortgage Calculator is a great start on your path to home ownership, but it’s just the first step. We’ll post more about this soon, but if you need to know more right away, why not call one of our Mortgage Loan Originators.
A consultation with a mortgage professional is always free and there is never an obligation to work with us when you do decide to buy a home.