How Much Home Should I Buy n Florida?


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Deciding how much house to buy in Florida is a very personal decision.  Many factors come into play.  How much can I borrow?  How much can I put toward my down payment?  What size monthly payment am I used too? What size monthly payment can I afford?  What will be my out of pocket expense? What do my tax returns look like?

 

The answer is usually based on a number of factors:

  • Your age
  • Whether you are a Risk Taker or you are Risk Adverse
  • Underwriting Guidelines and how you earn your money
  • Your past experiences in Real Estate
  • Your Job Outlook in the last two years and the three years ahead
  • If you are thinking about getting married or divorced
  • The amount of savings you have for down payment, fix-ups and reserves later
  • The forecast for the Real Estate Market in your area

 

There are no black and white answers for these deeply personal questions.  Its a matter of figuring out what will make you truly happy.  If you plan on a 30 year mortgage, you can probably make a lower down payment and still manage the monthly payments.  If, on the other hand, you plan on a 15 year mortgage, you'll probably want to make a larger down payment to keep your monthly payments in line with what you can afford. 

 

 

It is my job to Show You the Money

 

rightHow large a down payment should I make?

Many buyers look at their cash on hand as their only source for their down payment to go buy a house.  One way to fund or partially fund a down payment is by using a gift.   FHA will accept a 5% gift. So will Fannie Mae but you will need your own 5% first. Fannie Mae and Freddie Mac will also allow 20% gift and you will not need need any additional money towards the down payment. Parents, grandparents and other family members are often eager to help by making a cash gift toward the purchase of your home.  You can also borrow against your 401K if you are short on cash to close. Sometimes, I can even pay costs for you. (Ask me about this) 

 

 

 

What size monthly payment would be comfortable?
What size payment would be aggressive but we are making an investment?

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When determining what size monthly payment you can afford, you'll want to consider what other monthly expenses you have.  Tangible expenses such as car payments, day care and utility bills, all play a role in how large a monthly payment you can afford.  Usually I start the conversation by asking the customer, "How much are you paying in rent? "Where would you like your total payment to be?"

 

Usually if that person or couple have been making rent payments comfortably, it would be nice if they would be able to get into a home of their own and around an equally manageable payment..

 

There are also the intangible expenses or lifestyle expenses that you'll want to consider.  Things such as dining out, travel and when you buy your next car can effect how much you can afford.  Are you willing to curtail or delay some of these expenses in order to afford a larger monthly payment?  A good example is, if you have a car loan with less than 10 payments, we don't have to count this in your debt ratios.

 

 

 

How much should I borrow?

This is a question you'll want to get answered before you begin your home search.   This is something that we're here to help you with.  Our mortgage calculators will help you see how your down payment, monthly payment and the amount you borrow are all interrelated.  As a rule of thumb, there are two ratios that we follow, a front ratio and a back ratio. The front ratio is your gross earnings compared to your housing payment and the back ratio is your housing payment and all of your debt compared to your gross monthly income.

Fha for example likes to see these ratios at 28% and 38% but I have seen loans go much higher.

 

When we gather all of your information we run your deal on line to an on line underwriting engine on the internet. The engine takes into account of all of your income, assets, credit and debts and gives us a feedback. Ideally it would like to see your two ratios at 28 & 38 but if the credit is good or the customer has a lot of assets, it will allow for higher ratios. Bottom line is that we have to run your deal on line to know where we stand. We can answer any questions you may have about the mortgage process.  But the best way we can help is by getting you pre-qualified for a mortgage loan.  To get started, simply complete the form below to let us know a good time to contact you.  We look forward to helping you buy your dream home.

 

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