We have got some news for you: all that time you have been saving and spending your money, you have been doing it the wrong way. The rule of saving is that your insurances, taxes and utility bills should not be more than 28% of your income. This is the only way you will be able to afford the monthly payments on a home for sale in Sandy Springs, GA and still keep depositing small amounts of your salary in your savings account.
Depending on the type of house loan you will be going for: FHA, conventional, VA, fixed-rate, etc, the debt ratio will vary accordingly.
The question that now remains is: What amount should you borrow?
The Down Payment
Let’s talk about the down payment first. How much have you saved? The minimum down payment is 20% of the house’s sales price. By paying the full 20%, you will be able to avoid private mortgage insurance. This will not only reduce the monthly payments but will also make a huge difference in the overall amount.
Here, let us explain it to you:
Let’s say that you saved $20,000 for a down payment for a home for sale in Sandy Springs, GA that costs $100,000. The thing to remember here is that the more money saved for the down payment means the less PMI you will have to pay. Typically, 1% is charged on monthly payments, when the down payment is below the 20% mark.
This also gives you the benefit of finding better loan options. Lenders will offer you better loan terms if the equity is more. For them, the high down payment works as an assurity that the loan will be paid in full.
Debt to Monthly Payments Ratio
If you are already tackling a student loan, then an affordable option would be to look for a house with monthly payments that are below the 28% mark.
Measuring the Land
Instead of just focusing on the house budget, you should also look at the space. How much space do you need? Do you plan to change your lifestyle in the future? If yes, then purchase a house in which you can see yourself living with your family for the next decade.
Think Twice Before You Borrow
You don’t want any financial stress after you have bought a house. A house comes with many responsibilities, which is why you should be mindful of some details while borrowing. Only borrow what you can afford. When you do so, you get the advantage of paying of your loan sooner by making bigger payments, due to you moving up the career ladder. This will trim your expenses and leave room for you to start work on your house instead.
When buying a home for sale in Sandy Springs, GA, always set the budget lower than the amount you plan to spend. This way, if your heart does get stuck on a house, you will be able to increase the margin and show the seller that you are negotiating on their terms. To look at quality listings that fall under your budget, visit America’s Network Realty Group Inc. and enter your specifications to find your dream house in the neighborhood of your liking.
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