What’s A Good Price For First-Time Homebuyers?
Buying your first-ever home can get rather nerve-wracking. No matter how much you pay, whether that feels like a lot or a little, you’re going to have some nights early on where you can’t sleep.
When I first bought a place, I buried myself under my blankets and didn’t come out for a while, and that happened for more nights than I want to admit. It was very stressful.
I even talked to a friend about this, and he told me that if I was worrying about what-ifs, then I was practically already there. He told me to chill out, okay? I got it.
The Lender Tells You How Much You Can Afford
Your first stop is probably going to be a mortgage lender or bank.
You might get a pre-approval or pre-qual letter free of cost or obligation.
You can use that to determine how much you can afford just based on your current finances.
That will at least set up a price ceiling you can use as an upper limit for your home search.
There’s no universal answer that suits everyone, but we’re able to talk about underlying stuff that comes up with solutions that work for you.
The National Association of Realtors has data that claims the national median home price for an already existing home for a single family during the last quarter of 2018 was $257,600, which was up 4 percent from the previous year, when it was $247,800.
First-timers might want to look for prices close to these points because starter homes usually fall on the cheaper side of the price scales. Then again, it’s not always so simple.
Home prices in different housing markets around the country are all over the place, with a lot of cities being over the median.
Also, your finances will factor in since they will limit just how much you’re able to afford, and there’s no way around that.
The mortgage lender or bank is only going to let you borrow so many dollars based on your down payment, income, and assets.
That means you could just visit to get your pre-approval or pre-qualification so you can know just how much you are able to afford. This is known as an upper bound, meaning you know you can’t exceed it.
Even if you’d like to purchase a million-dollar home, you might wind up getting limited to properties worth $400,000 because of your finances.
This is a good start since you at least have a pretty good idea what your price ceiling and affordability are. It means you’re able to set your filters on things like Zillow and Redfin so they don’t exceed your purchase price of $400,000.
If you’d rather not talk to anyone, you can even just run numbers on your own through a mortgage calculator, although odds are that it won’t be nearly as accurate.
Either way, you should look past money because there are certainly other considerations, like why you’re buying to start with, just how long you intend to stay, the features you might need, and so forth.
Do You Plant To Live Within, Below, Or Above Your Means?
Are you a frugal soul that enjoys getting by with less? Or do you swing for the fences? It’s not necessary to spend the full maximum that you’re able to afford.
It can even make some sense to buy under so you wind up with a safety net that can cover unexpected costs.
Using the instance from earlier, assume you only qualify for a maximum purchase price of about $400,000. It’s helpful, sure, but it also doesn’t mean that you should spend it all.
Before making a decision, let one of the experts at Mortgage Lending Texas help you find out exactly what loan is best for you. Contact us today Or Call Us @ (866) 772-3802 click here to go to the next article in this series.