For many people, buying a home is one of the largest purchases they’ll ever make. And for a task of this magnitude, homebuyers should plan accordingly to make sure they’re financially prepared to make the commitment. If you’re asking yourself, “how much house can I afford?” here are a few tips to help you get to the answer. (And if you want to crunch some more specific numbers, try Mr. Cooper’s home affordability calculator.)
1. Know Your Market
You should be very familiar with the real estate market where you plan to buy a house, so do some research upfront to determine the average cost of a home in the neighborhood you like. A little research before you start looking at homes goes a long way, and can help avoid surprises after you’ve fallen in love with a property.
2. Figure Out The Financials
When you set out to determine out how much house you can afford, you’ll need to take several factors into account:
- First, what percentage of the sale will you put down as a down payment?
- Second, do you have sufficient work history and consistent income?
These questions will be important in figuring out how much you will need to borrow. Stretching too far with mortgage payments could put you in a bind if an emergency happens, or when you’re faced with immediately necessary home repairs.
3. Fall In Love With Your Home
Once you become a homeowner, you are essentially legally bound to that property; anything and everything that goes wrong with it will be your responsibility. You will likely need to have extra money on hand to take care of unexpected events, which can be a smart thing to factor in to your new home-related costs right off the bat.
4. Know Your Resources
Your mortgage probably won’t be the only large payment you’ll need to plan for with your new home. You also need to consider the costs of your property taxes and your insurance, which are both largely determined by where you choose to live. Be sure to do your research!
If you’re ready to take the first steps to becoming a homeowner, don’t hesitate to get in touch with a pro at Mr. Cooper who can walk you through the process. Just consult our Home Buying Guide to get started.