Can You Afford That House?
Before you start searching for your dream home in NH, MA, or ME, you first need to determine a price range you can afford. According to the Federal Housing Administration (FHA), depending on the consumer's current debt ratio, most people can typically afford to pay 31% of their gross monthly income for mortgage payments. For example, if you earn $50,000 annually, then your monthly income is about $4,167, and 31 percent of that is $1,292.
There are several tools on Verani.com to calculate a monthly mortgage you can afford using factors such as your current monthly expenses, down payment and the interest rate. You can also work with a lender such as CMV Home Loans to get pre-qualified for a loan. This estimate will help you gauge how much money you may be able to borrow and the monthly mortgage payments.
However, the amount you are able to afford for a home loan should not be your only consideration for determining your price range.
| With homeownership comes housing expenses.
Here are some expenses to keep in mind:
The most obvious of additional housing expenses are utilities-gas, electricity and water. But don't forget about telephone, trash collection, and cable or satellite bills.
As a property owner, you are responsible for property taxes. The rate will vary from city to city. On all the homes for sale in New Hampshire on Verani.com we list the current taxes. We also list the tax rate, for each town, which can vary. The tax rate is the usually stated as dollar amount per $1000 of access value. For example a $200,000 home and a mill rate of $15; the yearly tax bill would be $3000. To get a general idea on how much the tax bill will be for a property, ask the seller for a copy of the previous year's tax assessment. Your real estate professional can help you refine these figures.
Condo Association Dues
Another cost you may incur is homeowner association (HOA) dues. Most condominiums and some (residential developments/subdivisions/neighborhoods) have HOAs, which are legal entities, created to maintain common areas and enforce deed restrictions. As a property owner, you are required to pay the established monthly or annual homeowner association dues. Be sure you factor this cost into your budget.
Home and Property Maintenance
You also need to consider the upkeep of your home. You should budget for seasonal maintenance such as lawn care, pest inspections and carpet cleaning, as well as unexpected repairs. The amount you budget will depend on the age of the home, as older homes tend to require more repairs such as installing a new roof, painting and replacing older appliances.
Insuring Your Home
Depending on the type of coverage and your area, the costs for homeowners insurance each year can be anywhere from a few hundred to thousands of dollars. And, if you live in an area that has high risks for flooding, earthquakes, hurricanes, etc., you may need supplemental insurance.
Home Remodeling & Upgrades
Unless the home you purchase is picture perfect, you'll more than likely be adding your personal touch. Therefore, you need add to your housing budget the costs for remodeling and upgrades. According to "Remodeling Magazine's" 2007 Cost vs. Value Report, the national average for a midrange minor kitchen remodel is $21,185; a bathroom remodel averages $15,789.
Even minor cosmetic fix-ups such as light fixtures, window treatments, carpeting and decorative cabinet knobs can begin to add up.
By determining all the costs associated with homeownership, you can go into your home search with a reasonable price range that will allow you stay within your budget. Let your Prudential Verani Realty Realtor assist you today!