How much HOME can you Afford?

Pre-Qualify Yourself

Many times as we visit new communities or tour existing listed homes we may not have pre-qualified ourselves with a lender as to the mortgage we can obtain or the dollar value of the home we can afford based upon the type of loan we are securing . This process can be overwhelming to  the uninformed and I would always encourage you to visit with a Mortgage lender prior to your searching for your new home to determine the plethora of options available to  you today to determine not only the most comfortable range of  price for your  new Home but  also the choice of the many options of the mortgage type that will suit your lifestyle whether it is a 15 or 30 year fixed or one  of the adjustable rate options available. The days of the wildness in lending are gone as you will need to document you have a job, down payment and the ability to repay the mortgage; however, loan availability is plentiful for those who can meet this back to grass roots lending documentation.

Consider Buying Today

If you where ever in the mood or need to buy home……. today is the day. A buyers market still exists and the interest rates for anyone living today that was born since the mid 1930’s have never been lower in their lifetime.  I can remember the mortgage rates of the high teens in the 80’s and would not suggest we will return to those levels but any of us that follow our current economic times of government deficit spending it is only a matter of time before inflation returns and interest rates rise as a result. This is  in this writers judgment is a fact and will occur.

Amazing Affordability

To demonstrate the reason for the title of  this article, if you consider that many buyers can today obtain a mortgage at 4.5% that with average credit, reasonable income (presumed to be $6,000 per month) , a car payment and no overwhelming credit card debt that with 10% down they could qualify for a home  purchase of approximately $240,000.  If the interest rate rises to 6% the home affordability drops to $207,000. If your income was $8,000 per month the difference is amazingly $56,000. The point I am making is the interest rate is probably one of the most important factors for you to consider on whether you buy today or wait tomorrow with all other considerations remaining constant. New home builders cannot lower the cost of building as the current housing cycle has forced them to squeeze every last cent out of the cost to build and efficiency and productivity is as you would expect at its pinnacle.

Frank Curran, Principle of the Fairways at Savannah Quarters, an Epcon Community, the number one national builder of attached ranch homes. He can be contacted at 912-450-9876 or visit www.fairways-sq.com

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