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Your Buying Power

Before You Look at Your First House

Experienced home buyers know that one of the first-steps in beginning a successful search for a new house is taking a hard, objective look at finances. Determining how much money you can dedicate to the purchase of your new house affects almost every aspect of buying a new home - including how we write the offer, which mortgage programs you will qualify for, shopping for the best mortgage loan and which homes are truly in your price range.


 

Here are the questions that each home buyer should ask:

  • How much cash is available for a down payment? The amount you have available for a down payment will affect what types of loans for which you can qualify. Learn more.
  • Am I ready to write a check for the earnest money? Earnest money is a cash deposit made to a home seller to secure an offer to buy the property. This amount is often forfeited if the buyer decides to withdraw his offer.
  • How much additional cash will be available to pay for closing costs? There are certain standard costs associated with closing the sale of a house. These fees are split between the buyer and the seller, as spelled out in the sales contract. 
  • What is the maximum monthly mortgage payment that I can afford? Most lenders will use the 28/36 rule to determine the maximum mortgage payment you can afford.

The 28/36 Rule
No more than 28% of your gross income can be applied to your mortgage, real estate taxes and insurance. And no more than 36% of your gross income can be applied to your mortgage expenses plus your regular debt expenses (car payments, credit cards, other loans, etc.).

Copyright © MLSListings Inc. 2017 All rights reserved. The data relating to real estate for sale on this website comes in part from the Internet Data Exchange program of the MLSListingsTM MLS system. Real estate listings held by brokerage firms other than Sotheby's International Realty are marked with the Internet Data Exchange icon (a stylized house inside a circle) and detailed information about them includes the names of the listing brokers and listing agents. Based on information from MLSListings MLS as of 2017-08-19 All data, including all measurements and calculations of area, is obtained from various sources and has not been, and will not be, verified by broker or MLS. All information should be independently reviewed and verified for accuracy. Properties may or may not be listed by the office/agent presenting the information. Information last updated on 2017-08-19.

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Arleen Hardenstein

Phone: 831-915-8989
Email Arleen

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Arleen Hardenstein | Sotheby's International Realty | Phone: 831-915-8989 | Email Me
Pacific Grove, CA 93950