Every realty website lists the asking price for the homes they are listing, but is that the final cost? Just like buying a new car, there are many other factors to consider when budgeting for your new home. The purchase price is simply the largest. Here are a few other considerations to keep in mind when asking yourself, “How much home can I really buy?”

Talk to Your Lender Before You Start Looking for a Home

The best way to get an answer to this question is to talk to a lender or several lenders before you even start looking for a home. A mortgage lender wants to get you into a home so they are going to work with you to find the lowest rates, the best payment options, provide you a Lender Letter for instant offers,and forewarn you about how much that first payment check may be. Remember that your down payment isn’t the only upfront expense.

Understand Your Fees

Closing costs may include: Survey and appraisal fees, inspections fees, transfer taxes, processing fees, HOA setup fees(if you buy in an HOA community), and insurance premiums. All of these add up and most are due before you even get the keys to your new home. Quite often the closing costs can range anywhere from 2.8% of the loan to 4% depending on the area, state of the home, and local regulations. A good lender will help you understand what your upfront costs will be as well as what your monthly payments will look like, which is the next big factor to keep in mind.

What can you afford to pay a month?

The mortgage payment isn’t the only revolving cost that comes with home ownership. Home owner’s insurance, HOA fees, living costs, and end-of-year taxes need to be budgeted in as well. Insurance and fees will probably not change very often, but usage costs such as power and gas might prevent you from making your payment. Your lender will help you figure out your monthly budget, find a payment that you can work with, and let you know about safeguards in case of emergencies.

So before you even begin wandering around your new neighborhood looking for that perfect house, talk to a reputable lender. Most real estate agents have a favorite that they will be more than willing to refer you to. Remember that by working with a lender and doing your research beforehand, you’ll be able to jump on the house of your dreams when you find it.

When you want a realtor who will make you their number one priority, it’s time to contact me to set up an initial consultation. Feel free to call True Performance Real Estate today and any questions you might have about selling your home!

Call: 303-317-6311