HOME

Buying A House   

Coldwell Banker Deep Creek Realty continually receives high praise for its professionalism and personal interest in its customers. 
Please consider me or any of our agents to assist you in home ownership.

 
bullet
      Mortgage Calculation   
bullet    House-Hunting Checklist
bullet      What are Points? 
bullet      Why use a Realtor?   

What Can You Afford ?
Even before starting to look at houses, find out what price house or condominium you can afford, says syndicated real estate columnist Dian Hymer. Roughly speaking, Hymer says, you can afford to buy a home equal in price to three times your gross annual income. More precisely, the price you can afford to pay for a home will depend on six factors:

  1. your income; the amount of cash you have available for the down payment, closing costs and cash reserves required by the lender; your outstanding debts; your credit history; the type of mortgage you select; and
  2. current interest rates.

Lenders also analyze your income in relation to your projected cost of home ownership and outstanding debts to determine the size loan you can have. Hymer says your housing expense-to-income ratio is determined by calculating your projected monthly housing expense, which consists of the principal and interest payment on your new home loan, property taxes and hazard insurance. The sum of these costs is referred to as "PITI."

Monthly homeowner association dues, if you're purchasing a condominium or townhouse, and private mortgage insurance are added to the PITI. Your housing expense-to-income ratio should fall in the 28 to 33 percent range, although some lenders will go higher under certain circumstances. Your total debt-to-income ratio should be in the 34 to 38 percent range.

How do you determine what a house is worth?
 Traditionally, people turn to two methods for determining home value -- appraisals and something called a comparative market analysis.

Appraisals vary in cost depending on the price of the home, though they average about $300 for a $250,000 house. Appraisers review numerous factors including recent sales of similar properties, location, square footage and construction quality. An appraisal is "an estimate of a property's monetary value on the open market; an estimate of a property's type and condition, its utility for a given purpose or its highest and best use," according to Charles O. Stapleton III, Thomas Moran and Martha R. Williams, authors of "Real Estate Principles," 3rd Ed., Dearborn Financial Publishing, Chicago. Comparative market analysis is an informal estimate of market value performed by a real estate agent or broker. It is based on like sales and generally offers a range of values including probable market value. Many agents offer a free analysis or property profile in hopes of acquiring a new client, says real estate writer George Devine. "Brokers' opinions, free or not, should be in writing, using professionally accepted appraisal techniques," says Devine. Individuals can also do their own cost comparison, though doing so may take several hours of research at the county recorders office. Most county recorder's offices have indexes to match street addresses and parcel numbers.

Private companies, using records from county recorders and assessors offices, now offer property price information.

 

            

Scott Johnson
Coldwell Banker Deep Creek Realty
24439 Garrett Highway    
McHenry, MD 21541
     
1-800-252-7335  
1-301-387-5303 Ext.110
1-301-501-0555 Cell