The “rule of thumb” regarding loans is that your monthly housing payment such as the taxes, bills, insurance, mortgage, etc., should not be more than 28% of your income that you receive every month. When it comes to FHA loans, the balance of ration might be higher. The question that remains is, “How much do I need to borrow when buying your Farmington Hills Home?”
Here’s what you should focus on: it all comes down to “down payment”. The higher the amount you have saved, the easier it will be to get a mortgage loan for your Farmington Hills home.
Confused?
Let’s clear this up for you. Following is some pertinent information that all homebuyers should know about before buying your Farmington Hills home:
Counting Your Savings
As said earlier, down payment plays the biggest role in the home buying process. If you have 20% down payment saved up, then you don’t have to worry about private mortgage insurance. Let’s say that you saved around $20,000 for the down payment. If the home in Farmington Hills, costs $100,000, then you are building equity from the start. However, if the asking price is higher than this, then you will be charged a PMI anywhere between 0.25% and 2%.
All in all, you will be borrowing less if you have the 20% down payment or more. Moreover, the lender will be more open to giving you a loan and at a low interest rate when buying your Farmington Hills home.
Debt
When calculating the monthly payments, factor in your debts too. Aim for a house that will cost you less than 28% of the monthly income. This is because you will be paying down your debts, and any missed payment might result in a penalty
Kinds of Houses Are You Looking For In Farmington Hills?
What are your future plans?
Do you see yourself having a family?
How many kids do you plan to have?
What are your aspirations regarding your job in Farmington Hills?
How is your lifestyle?
Questions like these give you a clear perspective of what kind of house you should buy in Farmington Hills. The price of the house increases depending on the neighborhood and the facilities offered within the community. The number of rooms, backyard, driveway and garage also play a role in the price range. Set a margin and tell your real estate agent to stick to it. Be realistic about your needs.
Be Mindful When Borrowing
Don’t bite more than you can chew! Financial stress is the worst and can quickly lead to depression. So, look for a house in Farmington Hills that falls under your budget and amounts to monthly payments you can easily pay.
Now you understand why it is so important to assess your financial situation before making this move. Look for a house that you think you can spend the next 10 to 20 years in. Changing houses within the span of 5 years will financially bankrupt you. If you want to buy a home for sale in Oakland County, Michigan, that falls under your budget and has all the features you need, then visit Homes2MoveYou.