How Much Can I Afford?
Before you go out looking for a home, it's good to get an idea of what you can afford. One quick way is to try our FINANCIAL CALCULATOR tools from HomeServices Lending. These handy tools will help you estimate how much mortgage you can handle before you start looking for a home.
Another thing to consider is your down payment amount. It is very important to begin communicating with a mortgage company early in the process to understand and plan for the various loan product offerings available in the market when you are ready to buy. You also want to be aware of any tax credits for new homeowners and first time home buyers. Semonin Realtors has a very solid recommendation for your next mortgage company. HomeServices Lending is our affiliated mortgage company when working with buyers.
The Benefits of Equity
Equity is the difference between what your home is worth and what you still owe on it. When you sell your home this equity can be used as a down payment on a new home. If you don't sell, this same equity can be used as collateral for a home equity loan. You can use a home equity loan to finance home improvements, college tuition, or a new car.
Real estate is also a great way to keep a hedge against inflation. While some homes do appreciate in value more quickly than others, real estate usually keeps pace with inflation. (Your real estate agent can provide you with the housing appreciation rates in the areas in which you're interested in buying.)
That Wonderful Thing Called A Tax Break
As a homeowner, when filing your taxes you can deduct the interest portion of your monthly payment and that can mean BIG savings. You can deduct your property taxes, too! So look at what your monthly mortgage payment will actually be, taking your tax breaks into consideration. You may find out it's about the same as or sometimes even less than a rent payment!
At the end of a tax year, usually the calendar year, you take the interest you paid to the mortgage company and add the taxes you paid on your property together and then multiply by the tax rate (the tax rate is based upon your adjusted gross income and tax charts) to find your savings amount. This assumes you can itemized deductions on your taxes. It sounds complicated but the basic idea is buying a home saves you money on your tax returns.
Pre-Qualification vs. Pre-Approval
Pre-qualification is just a rough estimate of how much you could afford. But with a pre-approval, it's just that: getting your mortgage approved prior to going out and looking for a new home.
Your mortgage consultant will show you which items you should bring to apply so neither of you will need to wait for various written income, asset and liability information. So you could get a loan decision in just days depending upon your pesonal history and documentation. And with a Homeservices Lending mortgage consultant you can get your approval quickly!