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How Much Home Can I Afford?
The Search for your Dream Home
Before you go out looking for a home, it's good
to get an idea of what you can afford.
Another thing to consider is your down payment
amount. Think you can't buy a house without a
10% or 20% down payment? Thanks to more lenient
government guidelines and new mortgage products,
many people can now get into a house for as
little as 3% down or less. There are even some
special programs for first-time buyers that help
with closing costs. It is now easier to
buy your North Carolina Mountain real estate
home!
The Benefits of Equity
Equity is the difference between what your home
is worth and what you still owe on it. When you
sell your home this equity can be used as a down
payment on a new home. If you don't sell, this
same equity can be used as collateral for a home
equity loan. You can use a home equity loan to
finance home improvements, a child's college
tuition, or a new car.
Real estate is also a great way to keep a hedge
against inflation. While some homes do
appreciate in value more quickly than others,
real estate usually keeps pace with inflation.
(Your real estate agent can provide you with the
housing appreciation rates in the areas in which
you're interested in buying.)
That Wonderful Thing Called A Tax Break
As a homeowner, when filing your taxes you can
deduct the interest portion of your monthly
payment - and that can mean big savings. You can
deduct your property taxes, too.
So look at what your monthly mortgage payment
will actually be, taking your tax breaks into
consideration. You may find out it's about the
same as - or sometimes even less - than a rent
payment!
With a 5% down payment, a $100,000 30-year
mortgage loan at 8% interest (8.15% APR)
requires a monthly principal and interest
payment of $733.76. Assuming a 28% tax bracket
and $150 for monthly property taxes, the
after-tax monthly payment would be about $615!
(This is only an example. Please consult a tax
advisor regarding your own tax situation and
current tax laws.)
Pre-Qualification vs. Pre-Approval
Pre-qualification is a rough estimate of how
much you could afford. But with a pre-approval,
it's just that: getting your mortgage approved
prior to going out and looking for a new home.
This critical step launches your home purchasing
experience.
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Buying a Home?
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If you have any questions or would like more
information, please contact us 828-776-7244 ,
email us, or use our
online request form. |
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