Baltimore First Time Home Buyers: How Much Home Can I Afford?

Saturday, December 27, 2014

How Much Home Can I Afford? | Baltimore Real Estate

by Helene Kelbaugh of Keller Williams Legacy Metropolitan in Baltimore

Let's Chat! Buyers & Sellers: (443) 465-8443

How Much Home Can I Afford?

First, let me applaud you for thinking about this first! More often than not home buyers, especially first time home buyers, start off with looking at a million homes prior to talking to a REALTOR® to get preapproved by a trusted lender. Preapproval is when a Preferred Lender pulls your credit score, and collects income, savings and additional information to determine how much home you can afford. When you have this information up front, it is gives comfort to the home buying process. You know what you have to spend and what price range you should be shopping in.

For a quick FREE cheat sheet download on How Much Home You Can Afford click here for it!

What Do I Need For Financing?
Financing may seem overwhelming and confusing. If you are working with a REALTOR® and lender who have a great working relationship both will educate you as the buyer on the process from beginning to end. This process will change from clear as mud to clear as a bell! Depending upon the type of financing you will use for the home purchase and state, the basic documents a lender will require are:

W2's
Pay Stubs (several months per lender)
1099's (if applicable)
Tax Returns
Bank Account Statements

There may be additional forms needed for financing depending upon the type of financing and contract contingencies, for example a gift letter (for proof of funds from a relative) or VA documentation etc. Your lender will go over any additional forms that may be required for financing. These documents will help determine what dollar amount you will be preapproved for home purchase. These documents should back up the verbal income information that was given to the lender initially.

FREE Home Affordability Cheat Sheet

It is always a great idea to talk with a lender to drill down numbers that are specific to your and financing.

Should I Consider Anything Else?

Depending on the area you are buying your home, it is critical that you talk to your REALTOR® about additional fees or expenses that could go along with the house. For example:

Home Owner Associations
Condo Fees
Home Owners Insurance
*Flood Insurance
Taxes
Special Assessments

Most people are familiar with HOA's and Condo Fees. Did you know that 2 neighboring homes could have two different home owner insurance rates, even if it's the same carrier and comparable home. This can be based on so many different factors! Considering a waterfront home in Baltimore? Do your homework! Flood Insurance is a separate insurance required if the home is deemed waterfront. Review the FEMA website as well for additional information about flood insurance.

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