 How
much can you afford?
When purchasing a home there are a
number of figures to consider to
determine what you can afford. To
assure you are purchasing a home within
the confines of your budget, you must
carefully consider your mortgage payment and
closing costs.
First it is a good idea to crunch some
numbers and determine your estimated
mortgage payment. Several formulas have
been made available to help in
determining this figure, but the most
reliable formula is known as a front-and
back-end ratio. It states that the buyer
can afford as much as 28 percent of his
or her gross-monthly income toward the
monthly mortgage payment provided the
consumer’s other debt payments are equal
to or less than 8 percent of his or her
gross-monthly income. These additional
debts may include credit cards, car or
student loans.
 Secondly, it is wise to consider how
much money you, as the buyer, will be
required to pay out of pocket and up
front in order to purchase a home. This
collection of figures is most commonly
referred to as the closing costs. The
down payment is simply the amount of
money the buyer needs to invest at
closing toward the overall cost of the
home. This figure is generally 20
percent of the total cost requested by
most lenders.
Closing costs can include attorney fees,
home inspection costs, title search
fees, bank fees, termite inspection fees,
and radon inspection fees to mention a
few. While the mortgage lender requires
some of these additional fees, some are
legally required depending on the
location of your new home. Closing costs
can be generally estimated as 1 to 5
percent or more of the total value of
the home. For additional information
about closing costs for Winchester VA
Homes for Sale, contact your local
buyer’s agent, Paul Loveless. No one
knows Shenandoah Valley Real Estate
Market Trends like Paul loveless.
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If you have any questions or would like
more information, please call us at
540.955.0730 or send an email to
paul@paulloveless.com.
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