How much house you can really afford may not be what you think
No one plans to default on a mortgage the first year they purchase a home; however, 2 out of every 10 home buyers with FHA insured loans default within the first year of purchase based on Neighborhood Watch data provided by HUD.
When you are pre-approved for a mortgage the lender calls this the amount you can afford. This affordability amount does not include monthly home maintenance, unexpected repairs, or lifestyle changes, as job loss.
When you decide on the amount you want to pay for your home you should definitely consider this extra costs. This means if you are pre-approved for $100,000 this is the maximum purchase amount of your home loan in which your monthly payment will be estimated.
Sit down with your pre-decision counselor at Rhodes Porter Realty Group to discuss your monthly home budget. This budget will include the mortgage payment, fixed and variable costs associated with your daily lifestyle. A recent study commissioned by NeighborWorks showed that homebuyers who work with our network organizations are one-third less likely to become 90 or more days delinquent during the first two years of homeownership than those who do not.