While looking through the different homes put up for sale, the one thing that comes to everyone’s mind is – can I afford it? Often this is one glitch that keeps most people away from their first dream home. It is a nightmare when housing prices climb faster than incomes and people are stuck with huge mortgage rates that they can hardly afford. However, when you have the right person to guide you and a reliable lender to lend you the money, you are on the right track. You can actually afford a home that you had actually written off as impossible. In fact, latest reports have come up with the fact that many of the homes are now within the reach of middle class.
While checking for home affordability
To check for home affordability, you will have to go through the Housing Opportunity Index or the HOI provided by the National Association of Home Builders. It examines the median prices for homes sold by taking into account the median income levels, so it is possible to determine the percentage of homes affordable to residents. It considers the median income too. There are other factors that go into checking home affordability. Consider the cost of living index by looking at the cost of food, medical facilities, utilities, gas, transportation and a horde of other factors that go into daily living.
Compare this with the national average and you will know where the neighborhood ranks in the cost of living index. There are other ways to check for affordability too. You can add the details of your annual income, monthly debts, down payment and other parameters in an affordability calculator to come up with a figure that works on your budget. Once you calculate how much you need to pay off as debts and mortgage payment, you will be able to reach a wise decision. Of course, you can even leave some cash aside for emergencies.
It is interesting to note here that first home buyers in the past were satisfied with older homes and homes with basic functionalities, but that has changed now. However, it would be advisable for buyers to buy homes that would help them buy equity and then later they can move on to a second-stage home which would be bigger and of course, with better facilities. Finding a home that fits in within your “affordability regime” may not happen as fast you think. Some first time homebuyers spend time looking at 10-20 homes before they finalize on a deal. Only about 46% of the buyers look at 5-10 homes before they purchase one.
To ensure you are on the right track and to make your home search quicker, you can get in touch with Zykor Homes.