Ahhhh Math!!

So… now that we are looking for a house we need to figure out what we can afford and more importantly what we should afford.  This is the "not so fun" math portion of buying a house!!  AHHHH (I haven't done this much math since college freshman year!)

Now let me preface this entry by saying I am not a mortgage expert. These are just my thoughts from my experiences so far as we are trying to figure out how to buy our first home.

This is the process we are following:

Ideally the mortgage and pre-approval should be determined before you even look at a house; as this will help you decide what price range you should be considering.  We are working with a mortgage consultant that was recommended from one of my friends and fellow Realtor. 

What we have decided we can afford is actually much less than what we were approved.  We came to this conclusion once we looked at all of our monthly expenses- and keeping in mind that we may want to have children soon (and it's my understanding those can get expensive)- so we do not want to stretch ourselves too thin!

It’s important to figure out what you are comfortable spending per month on a mortgage payment.  The monthly payment is the number you need to pay the most attention to- not just the approval number.  Once you have a property in mind you can send this property information (address, price) to your mortgage consultant and they can give you a very good estimate of what your monthly payment will be.

When your mortgage consultant gives you an estimated monthly cost find out if this cost includes taxes, insurance and PMI (Primary Mortgage Insurance).

We have reviewed our budget and figured out what we are comfortable spending taking into account our other payments such as cars, insurance, phones, electric, Internet and cable… etc.  Also since we are moving from an apartment we have to consider new bills such as water, trash- other unexpected expenses that we will no longer be able to call the landlord for. :(

We have come up with an ideal monthly payment and are trying very hard to stay close to this number.  It’s my suggestion to other buyers to do the same thing- figure out how much you can give to a mortgage payment each month and work backwards to see how much you afford on a house.

This is the most important part of buying a home; it’s also the least amount of fun! But it is so necessary and vital to avoid getting in over your head. So take your time and really think about what you are comfortable affording. 

Ok that's all I have right now- and I will try to make the next entry less math centered and focus on fun side of buying a house!! 

JCS