Buyers – What You Can Afford
Talking to a Mortgage Lender is an important first step in finding a purchase price you can afford. Before investing time and energy, looking for your perfect home and getting your heart set on a particular property, you need to know what price range to look for. Pre-qualifying with a Mortgage Lender will give you an estimate of how much you can afford based on your income, expenses/debts, down payment, and credit rating.
Your down payment can vary depending on the loan programs you qualify for. Some government and local programs may only require 3% or less as a down payment. If you are concerned about finding the money for a down payment, the payment can come from various sources beside savings:
- Equity you may have in a property you are selling or own and may not wish to sell.
- A financial gift from a family member.
- Borrowing against your existing retirement accounts, forced savings or moneys you might already have invested.
Remember that as a homeowner you will be able to deduct the interest portion of your monthly payment and the property taxes you’ll pay on your home. This tax break should be taken into consideration when figuring out your mortgage payment. It could be less than what you are paying for rent presently.