How much home should you really buy?
This is a much different question to how much of a home mortgage you can qualify for. So what’s the difference? What factors should you be looking at?
How Much Home Can I Afford to Buy in Seattle?
Once you get pre-approved for a home mortgage you’ll know exactly how much house you can afford to purchase. Your loan approval will tell you how much you might need to bring in cash depending on the purchase price of the home you are buying. Your loan approval will also tell you approximately how much your monthly payments will be depending on the home price. And of course give you a guide for going out looking for houses with a real estate agent familiar with the Seattle housing market.
If you want an answer right now, Get a Free Home Loan Quote and not only find out how much you can buy, but lock down a rate.
Am I Ready to Buy a Home?
If you have no job, no income, a 500 credit score, have not been paying your rent on time, and have zero money in the bank, then you probably are not ready to buy a home just yet.
That doesn’t mean that you can’t turn this situation around in the next 12-24 months. But you might want to work on those items first.
If you have a job, have a steady income, have at least a 640 credit score, have paid your rent no later than 29 days late in the last 12 months, and have a couple of bucks in the bank, you should absolutely try to buy a home.
Even if you aren’t sure if you will stay in this home or condo, or even in Seattle for long, remember that you can always rent it out later or sell and move up. In all of these scenarios buying a home in Seattle is normally the best path to making those other dreams a reality.
Do I Qualify?
In order to qualify for a Seattle you’ll need:
- At least a 620 credit score
- 2 years of employment in the same career field
- 2 years of timely housing payments
- A down payment of 3% or more
How Much Home Should I Buy?
In the past many people have instinctively maxed themselves out when purchasing homes. But just because you qualify for a certain loan amount, or can handle a certain amount in payment each month doesn’t mean you have to go that high.
In some cases it might be worth stretching a little. Especially if it means the choice of buying a home now or being trapped as a renter forever. However, you also want a home that you can sustain and will be happy with for years to come.
Consider the following factors when making your decision…
Happy Home vs. Big Burden
Letting your emotions trick you into buying too much home can turn what should be one of the best moments of your life into daily remorse, and ongoing stress. In the reverse; sometimes being too conservative can do the same thing. Try to find balance in the middle. And remember that you can always add on or remodel later.
What are Your Goals?
Beyond buying a home, what are your goals? Do you want to be debt free, and have a home paid off so that you have extra cash in your pocket each month? Or is having a bigger and better home, or a home in the right neighborhood critical to your long term goals?
How Long Will You Stay There?
How much Seattle home you buy may also take into account how long you’ll live there. While many first time home buyers set out expecting they’ll live in their first home forever, it rarely happens. Most only stay in a home for a handful of years. This is even true when moving up. So remember that it isn’t permanent. You can move up later when finances are stronger. The exception here may be downsizing for ‘empty nesters’.
Is Your Income or Expenses Increasing or Decreasing?
Do you realistically expect your income to keep rising over the next few years? And what about space needs? Will expenses rise dramatically? Or will you have paid off big debts like student loans, and be even flusher with cash? Do you plan to have kids? Will you be taking care of aging parents? Or sending kids to college?
If you are thinking about how much Seattle home you can afford, and have questions like:
- How much home can I afford?
- What are my loan options?
- What will my interest rate be?
- How much will my monthly payment be?
- How much do I need to save for a down payment?
- What can I expect when it comes to signing?
- What documents will I need?
Contact Seattle's Mortgage Broker today to answer all of these questions and more. Happy home buying!