Whether you’re considering a home in Flower Mound, Ft. Worth, Frisco, or anywhere in the Dallas metro area, you may be wondering just how much home you can really afford without putting yourself in a financial bind. Many potential buyers believe that because a lender approved them for a mortgage, they can afford it, but this isn’t actually the case. There are lots of factors that impact how much a person can afford, and they vary from one person to the next!
Tips from our Flower Mound real estate pros:
Calculators will tell you that your mortgage should be anywhere from 28% to 36% of your monthly income depending on which you use, but this isn’t necessarily true. These calculators don’t know how much you may have saved for a down payment, or what other debt/financial obligations you have. Mortgage calculators can be helpful, but only if you’re sure to include all costs including those for gas, groceries, day care, etc.
There’s a difference between reasonable and realistic. Your lender may believe you can easily afford a $2,000 per month house based on your income and other debts. That’s all well and good, but what about saving for the future? If you bring home $6,000 per month and spend $5,000 on the mortgage, car payment, ATV payment, groceries, cell phone, satellite, gas, electricity, etc., it doesn’t leave much to put back for your kids’ college or retirement years. Regardless of how much your lender determines you can afford, be realistic. You know your own situation.
Consider the following to know how much you can realistically afford
How much is your current net income, and what are your fixed costs and living expenses? Make a list if you need to.
How much will maintenance costs be in your new home? Everything needs maintenance, including homes. From painting, a new roof, new appliances when the old ones bite the dust to the HVAC system or plumbing, there will be maintenance costs.
Do you have a substantial down payment? The more you can realistically put down on your home, the lower your house note will be each month.
Are you looking to save or invest in the future, and how much do you want to put aside?
These are important questions to ask yourself, and it ultimately comes down to the fact that only you can decide how much of a monthly mortgage payment you can comfortably afford. Consider everything carefully before you jump in with both feet!
At Team Nelson our realtors want to help you find your dream North Texas home – and one that you can truly afford without possibly putting your finances in a precarious situation. Give us a call today, we’re happy to assist you!