How Much House Can You Afford? 5 Questions to Ask

With thousands of houses on the market in Victoria, TX, you may not know where to look first. A good place to start is eliminating all of the properties that exceed your budget. How much Victoria real estate can you afford? Ask yourself the following questions to get a better understanding of what's in your price range.

How Much House Can You Afford? 5 Questions to Ask

1. How Much Can You Put Down?

One of the key questions to answer before you begin your home search is to determine the amount that you can spend on the down payment. Ideally, you'll want to be able to pay at least 20% of the house's cost as the initial down payment so you can reduce costly interest payments. The more you pay initially the better, so you may opt for a less expensive home.

2. What Is Your Expected Monthly Income?

Once you make your down payment, you're responsible for monthly payments until you've paid off the house in full. Determining the house you can afford ultimately rests on what you can afford to spend each month. Typically, lenders will approve loans with payments no greater than 28% of your monthly income.

3. What Are Your Existing Debt Obligations?

There's more to the story than your monthly income. Lenders will also look at your debt-to-income ratio, which adds up all of your debt obligations and compares them to your monthly income. After taking your other monthly debt payments into account, lenders can revise your offer so that your total debt ratio doesn't exceed 36% of your monthly income.
So if your student loan payments make up 10% of your monthly income, you may not be able to afford a house even if monthly payments are less than 28% of your monthly income. If you have high debt obligations, don't give up on your dream house. You may still be able to get approved by paying more than 20% for the down payment or by having a great credit score.

4. What Are the Typical Prices for Victoria Real Estate?

The amount of house you can afford varies greatly by the area. Real estate in Victoria will differ from neighboring cities and can change even from street to street. A real estate agent can give you the best information on local real estate prices and what a good deal looks like in a given area.

5 . What Will Be Your Property's Expenses in Victoria, TX?

Paying monthly mortgage payments is just one of the expenses you'll have to take care of. First, you'll have the upfront payments of closing costs. Once you're settled in, you'll be responsible for property taxes and homeowners' association dues. It's also a good idea to get homeowners' insurance in case something were to happen to your property.

Narrowing down the search for your next Victoria home is once easier once you know what's within your budget. Find the best home for your lifestyle and your desired price range by teaming up with the experts. Contact us at Greg Spears Realty to buy and sell your next home!

Post a Comment