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How do you know what price range to look at?

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kam29
LIF Infant

Member since 3/06

297 total posts

Name:
Kelly

How do you know what price range to look at?

My DH and I are looking to buy and have NO idea how much we can afford, what price range to look at.

How do you know?

Posted 7/10/06 9:51 AM
 
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MrsBlueSash
Love my sailor

Member since 6/05

5793 total posts

Name:
Christian

Re: How do you know what price range to look at?

There are a lot of payment calculators on the web. They say 33% of your income should go toward your mortgage, of course you can pay whatever percent you want, that's just the standard figure that I've seen. I would figure out what 33% is for you, have the amt you have for a downpayment ready and use a calculator (any mls site usually has these) to figure the total cost of a house back from those numbers.

Posted 7/10/06 9:58 AM
 

Diana1215
Living on a prayer!!!

Member since 10/05

29450 total posts

Name:
Diana

Re: How do you know what price range to look at?

I would def. suggest meeting with a mortgage broker. They will be able to tell you how much you can afford, what price range you should consider, and how much your monthly payments will be (and also a estimate of what closing costs are)

Posted 7/10/06 10:02 AM
 

MegZee
My bunny

Member since 5/06

8777 total posts

Name:
Meaghan

Re: How do you know what price range to look at?

if you are seriously looking, I would get pre approved first by a lender.

or use the calculators on bankrate.com

Posted 7/10/06 10:02 AM
 

kam29
LIF Infant

Member since 3/06

297 total posts

Name:
Kelly

Re: How do you know what price range to look at?

Thanks for your help.
We were casually looking but now we're seeing houses that we like, are looking at a huge price variance and I didn't know where to start.

Posted 7/10/06 10:11 AM
 

Diana1215
Living on a prayer!!!

Member since 10/05

29450 total posts

Name:
Diana

Re: How do you know what price range to look at?

It really helps to meet with someone. When DH and I first started looking we were looking at houses that were about 50K less than the one we ended up buying. We didn't realize how much we could afford (and we only afford this on 1 salary)

Posted 7/10/06 10:21 AM
 

Redhead
You Live, You Learn

Member since 5/05

31871 total posts

Name:
Jennifer

Re: How do you know what price range to look at?

Posted by Diana1215

I would def. suggest meeting with a mortgage broker. They will be able to tell you how much you can afford, what price range you should consider, and how much your monthly payments will be (and also a estimate of what closing costs are)



i agree....

so many things play into what you can and cannot afford

down payment
taxes
interest rate
your incomes...
whether you plan to have an apt for extra income..

etc etc etc

ETA...we talked to a broker and gave him some house prices we were thinking of

he gave us a rough estimate on what our mortgage payments would be like with a estimated tax amount and the down payment we are looking to put

so that is where we have our frame of reference when we see houses...


ETA again: Please do not look to lending companies to see what you can afford

they gave us ridiculous loan amount...that we would never be able to pay (that is unless we both worked 24/7)

Message edited 7/10/2006 10:41:49 AM.

Posted 7/10/06 10:38 AM
 

kam29
LIF Infant

Member since 3/06

297 total posts

Name:
Kelly

Re: How do you know what price range to look at?

Posted by Redhead

Posted by Diana1215

I would def. suggest meeting with a mortgage broker. They will be able to tell you how much you can afford, what price range you should consider, and how much your monthly payments will be (and also a estimate of what closing costs are)



i agree....

so many things play into what you can and cannot afford

down payment
taxes
interest rate
your incomes...
whether you plan to have an apt for extra income..

etc etc etc

ETA...we talked to a broker and gave him some house prices we were thinking of

he gave us a rough estimate on what our mortgage payments would be like with a estimated tax amount and the down payment we are looking to put

so that is where we have our frame of reference when we see houses...


ETA again: Please do not look to lending companies to see what you can afford

they gave us ridiculous loan amount...that we would never be able to pay (that is unless we both worked 24/7)




Thanks, this information is really helpful!

Posted 7/10/06 11:34 AM
 

MommaG
Yay Spring!

Member since 5/05

5133 total posts

Name:
Gloria

Re: How do you know what price range to look at?

Many places use the 28/36 formula ( I believe it's 36). Your mortgage should be no more than 28% of your gross income, and all your bills combined (taxes, insurance, electric, gas, water, etc) should be no more than 36% of your gross income. This is supposed to give you a comfortable payment.

I prefer to look at my take home pay instead. You can figure out your other bills and see what's left. All the realty website have calculators to show you what you can afford depending upon taxes, down payment and rates.

Posted 7/10/06 12:47 PM
 

DeLeNi
LIF Zygote

Member since 4/06

15 total posts

Name:
Christina

Re: How do you know what price range to look at?

Definately speak with a mortgage broker before you start looking. They will be able to tell you exactly what you an afford. I can recommend a great guy. FM me!

Posted 7/10/06 12:49 PM
 

schnapy
LIF Adolescent

Member since 9/05

766 total posts

Name:
Diana

Re: How do you know what price range to look at?

we based our purchase with how much we would be comfortable paying every month, anfd what we had saved.

Posted 7/10/06 2:53 PM
 

LSP2005
Bunny kisses are so cute!

Member since 5/05

19460 total posts

Name:
L

Re: How do you know what price range to look at?

I would look at what you pay in rent and then add in taxes, insurance, gas, electric, water, home repair, cable, internet, phone, cell.

Depending upon the size of your home it can vary but I will give you rough estimates of our monthly payments to help you.

monthly
Taxes: 300
Insurance: 45
Gas: 127
Electric: 45
Water: 20
Cable/Internet/Cell: 200
Home Repair: that can vary a lot.
We don't live on LI so our taxes and insurance are prob a lot lower than what you would pay for a comperable home on LI. For LI I would tripple our taxes and quadruple our insurance.

I did not include any consumer debt like cars, credit cards, student loans, etc. Nor did I include savings like 401k, ira, emergency fund, 529, etc. You could also have daycare, etc.

Lenders like to tell you that you can afford a lot more than you comfortable could. My DH and I looked at homes at least 50,000 less than the maximum they said we could afford.

Posted 7/10/06 10:02 PM
 
 

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