Finding the Maximum Price You Can Afford for a Columbus Home
Think for a second about what it would be like to find your ideal home. It has everything you ever want and need from plenty of space to stretch out to natural sunlight to even some luxury amenities that you’ve always dreamed about. Maybe this home is at the very top of your price range or even just out of reach in the area of what you want to live. In today’s seller’s market, it’s probably highly likely to be outbid by another buyer with stiff competition as well.
Just thinking about this situation can be immediately discouraging, but it is not uncommon for many homebuyers all across the nation even here in the Columbus area. Last year more than 20% of the homes sold in the US went for more than their listing price.
It can vary be very difficult to fall in love with a Columbus home that has everything you want only for it to be just out of reach. This is why it is so important to figure out the maximum price budget that you can afford to offer on a home. There are actually some ways that you can stay within your maximum budget and not play the price wars game with other buyers while still winning out a house you really love. But it does all start out with making sure that you know exactly what your maximum price budget is. Here are some ways to help you find out what the ultimate price limit for a home is for your personal finances.
Go Over Your Expenses Carefully
Figuring out this exact number of your highest price limit requires some homework on your part. You will want to take a look at your monthly budget including your bills and spending as well as your savings and investments to help you figure out what you can afford for a down payment and what you can afford to pay as a monthly payment. Other cost factors such as insurance and taxes should not be forgotten either. You do not want to spread yourself too thin to get into a home or win out over somebody else’s higher bid.
Seek Expert Advice
It is a good idea to talk with a financial advisor or even a mortgage professional to help you most comfortably and smartly arrive at this exact number. The first step is obviously to sit down and go through your monthly bills and your monthly income. You want to arrive at a number that you absolutely do not want to go above for your maximum monthly mortgage payment. Many financial experts will advise that your monthly mortgage payment should be no more than one-quarter to one-third of your total monthly income after taxes.
You do not want to stretch yourself to the point where all you are paying for is your bills and your mortgage with a little leftover for groceries. This is what some people used to refer to as living hand to mouth. Where there is not a penny left to spend on items of enjoyment like going out to eat once in a while, catching a movie, or purchasing some new clothing. You want to be able to still enjoy your quality of life while you are enjoying that home that you love so much. Once you figure out your maximum price of affordability that you do not want to go above you will want to set your target price just a little bit lower than that so that you may have some wiggle room to negotiate a slightly higher price should you need to in a bidding war.
If you go over all of your monthly expenses and decide what you can afford to pay on a house payment comfortably after all of your other bills are taken care of it is a good idea to have someone that is wise with money take a look at it and give their expert advice if this would be a sustainable home payment for you. This person should be someone with expertise and professional background in finances, an actual financial advisor that does this for a living, or a mortgage professional that has helped several people successfully get into a home that they can easily afford with their new mortgage.
It is always wise to know your personal price threshold before shopping for a house and falling in love with one. For more information on homes for sale in Columbus, Dayton, or surrounding areas please contact us anytime.