Posts Tagged ‘Home Owning’

How Much Home Can I Afford?

Many buyers are in the market for a new home but they’re hesitant in making a mistake of buying a home they can’t afford. How much home can you really afford? Home affordability depends on a range of factors. These include:

Employment status: Do you have a stable job and income? How long have you worked at your current job? Lenders will want to know if they can rely on you to make monthly payments for many years to come.

Credit Score: Over your adult life you have been building up a credit score. Every credit card and loan you have opened has figured into a 3 digit number from 300 – 850. The higher your number, the less “risk” you are perceived to be, and the more likely you’ll be extended higher sums of credit for a lower rate. Car loans, student loans, home loans, credit cards, and personal loans. How faithfully you’ve repaid them, and how many of them you have open, dictates your score.

Number of Dependants: Do you have children or aging parents for whom you are financially responsible? If so, consider medical bills, schools tuition, and daycare when calculating a reasonable budget.

Desired Location: A 2,000 square foot home in rural Nebraska costs dramatically less than the same 2,000 square foot home in the heart of New York City. Prices even range widely by suburb and neighborhood.

Savings: You will need money for a downpayment. Financial Expert Suzanne Orman recommends you put at least 20% down. That means on a $200,000 house, you should have $40,000 in cash to put down. You will also need additional cash for closing costs, as well as repairs and maintenance that are inevitable with homeownership.

Emergency Fund: Do you have a separate savings account worth 8 months of bills? You must have an emergency fund. Just ask the 15 million unemployed. Things can and will happen. You may be able to “borrow” money for a house… but in reality you really can’t afford one.

Interest Rates: Interest rates are at a historical low. A 30-year fixed rate mortgage is 4.74% . To put this in perspective, rates in the 1980’s were anywhere from 13-18%. This means big savings if you are in the position to buy.

Monthly Payments: If you have ever bought a car, one of the first things a salesman will ask you is, “Where do you want your monthly payment to be?” It’s all about rates and downpayments with lenders. Yes, it is important that your monthly mortgage payment is no more than 1/3 of your monthly income, but don’t be pursuaded into buying a house you can’t afford just because the monthly payments are appealing.

To find out what you can truly afford contact us at

(585) 279-8200 or email

Written by Carla Hill

Homeownership’s Amazing Benefits

The National Association of Realtors (NAR) knows how homeownership impacts the lives of Americans. That is why we are encouraging all to become homeowners.

According to The National Association of Realtors (NAR):

  • Homeowners are happier, healthier and enjoy a greater feeling of control over their lives.
  • Homeowners pay 80% – 90% of federal income taxes, contributing to federal programs that benefit all Americans.
  • Homeowners enjoy stable housing fixed rate mortgage payments that may not change for 15 or 30 years.
  • Children of homeowners are more likely to participate in organized activities and spend more time being active participants in their community.
  • Home owners do not move as frequently as renters, providing more neighborhood stability. In turn, this stability helps reduce crime and supports a sense of community.

Many economists have been touting a jobs recovery as the key to the housing recovery, but perhaps it is the other way around.

Recent indications show that housing contributes more than 15% of our Gross Domestic Profit, and for every home purchased, up to $60,000 is pushed into the economy over time in improvements and housing costs.

Additionally, each home sold touches 80 different occupations!