This is a question that I ask each and every day to every client I talk with. I NEVER ask them what their price range is; instead Ii ask them what they are comfortable paying a month. The Internet is a great tool for prospective home buyers. You can search from the comforts of your home and see what is available in any given area at anytime.
In addition, you can calculate mortgage payments based on a sale price and down payment. However; there are variables that not even the mortgage calculators can equate in properly. How much is the property taxes for that property? Homeowners Insurance? Any HOA fees or dues? Financing through FHA where you need to pay mortgage insurance? What rate do I use? These all factor in and affect the final monthly payment. So what on paper may look like to you an affordable payment may in reality not be. Once you start adding in all the additional expenses that come with owning a home the payment can increase $100.00 to $300.00 a month.
So, I always ask my clients the same question. "what are you comfortable paying a month for a mortgage payment?" I have found this answer has gotten me to a more true sale price point that is affordable or the client. A lot of times; they think they can afford X amount only to find out they need to be looking less than that to achieve what is comfortable for them monthly.
Once you know what you are comfortable at monthly ; you need to talk with a Mortgage broker about interest rate and back into a sale price...Otherwise you may end up looking at homes that you are not comfortable in making the monthly payments on and fall in love with a home.
Dave diCecco
Realtor/Broker
www.davedicecco.com
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