Dreaming of that new home can be fun, but finding out that you can’t afford it—not so much. Here are four things to consider before you start your search:
- Evaluate Your Budget: As a general rule, your mortgage payment should not exceed 28% of your monthly take-home pay. So for every $1,000 of net income, add $280 to your max mortgage budget. Buyers who are debt-free have more wiggle room than buyers who have more bills to pay. Also consider if a bigger home will increase your electric bill, if a new pool will increase your water bill or house maintenance costs, and if a larger yard might require costly yard maintenance
- Consider Your Debt: Follow the 43% debt-to-income ratio rule—meaning that your monthly mortgage payment, car loans, credit card bills and utilities should not exceed 43% of your gross annual income.
- Calculate Your Down Payment: The cash you have for a down payment will make a difference in your monthly house note—the more you put down, the lower your monthly payments will be.
- Research Ways to Save: Ideal Credit Union is committed to helping members make smart financial decisions—which is why we offer free access to HomeAdvantage®. Not only can you use this program to search for homes and find an agent online,but when you use one of our approved agents, you qualify for HomeAdvantage Cash Rewards*. Rewards equal 20% of the agent's commission, an average of $1,500 in savings at closing!
Interested in learning more about the home buying process as well as how to earn Cash Rewards on your dream home? Register for our upcoming Home Buyer seminar. Click here to RSVP. Visit our Real Estate Center or call us at 651-747- HOME (4663) today to get started!
*The HomeAdvantage® program is made available to you through a relationship between Ideal Credit Union and CU Realty Services. Cash Rewards are awarded by CU Realty Services to buyers and sellers who select and use a real estate agent in the HomeAdvantage network. Home buyers or sellers are not eligible for Cash Rewards if they use an agent outside this network. Using Ideal Credit Union for a mortgage is not a requirement to earn Cash Rewards. Cash Rewards amounts are dependent on the commissions paid to the agent. Ideal Credit Union may have specific rules on how your Cash Rewards will be paid out. Cash Rewards incentives are available in most states; however, are void where prohibited by law or by the lender. Please consult with your credit union to get details that may affect you.