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Hey guys, it’s Terri Sossaman with the Alisha Collins real estate team at RE/MAX The Group. Hey, I wanted to take a few minutes to talk to some of you first-time home buyers out there about how much house you can truly afford. One of the things that can kind of trip some people up as they are online looking for homes is these little mortgage calculators will popup to the side saying how much house can you afford, and you plug in the numbers and a lot of people think, oh man I can afford a $300,000 home, when in reality, those mortgage calculators are only calculating how much the principal and interest payment would be. It’s not including things like your homeowners insurance, and your real estate taxes, and those are gonna need to be included in your payment amount in order for you to be able to qualify.
A round figure that we have had stay pretty steady in the almost five years that I’ve been in real estate here in Casper, is between six to seven dollars per $1,000 that you finance for your payment amount. So that means that if you are financing $100,000, your payment’s gonna be around $650, and if you’re financing $200,000, your payment will be somewhere around the $1,300 mark. So that includes your principal payment, your interest payment, your homeowners insurance, and your real estate taxes, and of course, the best way for you to figure out how much home you can actually afford is to go get pre-qualified with one of our favorite lenders.
A lot of times they will take into consideration, well they have to take into consideration actually, all of your payments that are out there, and also too things like child support, if that’s something that you’re paying on, then it has to be factored into how much monthly payment you can afford. It comes into your debt to income ratio and those ratios have to be within certain numbers in order for you to be able to qualify. One thing though that they don’t take into consideration are things like your utility payments or your monthly grocery bills, things like that. Or perhaps if you have a life insurance policy that you’re paying on, but it’s not actually on your credit report. That’s still a monthly bill that you’ve got going out, but that’s not gonna get taken into consideration for your debt to income ratio.
So sometimes a lender will qualify you for let’s say a $200,000 home, so that’s gonna put your payment up around that $1,300/$1,400 dollar mark, but you are really wanting to keep that payment closer to $1,200, because you know that realistically that’s what you can afford. One of the things that we, as agents, don’t want to do, it get you into what we would term a ramen house, which means you’ve got so much house that all you can afford to eat at night for dinner is Top Ramen noodles.
So our job is to talk to you and ask you what your realistic picture is on what that monthly payment amount is that you can afford and you want to afford, and that’s the number that we’re gonna stick too. It’s not our job to get you into a much bigger home unless you tell us that’s what you wanna do.
So, just something to keep in mind, we want you to love where you live, so make it a great home buying and selling day. I hope these were some handy tips for you. Feel free to reach out, give us a call, text, or send us an email. Thanks so much, and I hope to see you soon.
📱▻ Alisha Collins Real Estate Team
Terri Sossaman RE/MAX The Group
Call or Text me on my personal cell phone (c)307-267-7103
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