How Much Can I Afford

How Much Can I Afford

How to Find a Home You Can Afford
Determining how much home you can afford in Durham, Chapel Hill, Carrboro and the surrounding area can be a trying process. Calling lenders, looking at mortgage loan programs and interest rates can be confusing, to say the least. There is an easy way to get started and give yourself an idea of where you stand. 

To get a clear picture of how much home you can qualify for, you need to contact a reputable local lender and let them analyze your entire situation. They can calculate your income-to-debt ratio, get your credit score, and give you the information you need. Typically, lenders like to see a ratio not exceeding about 28%. This does not take into consideration long term monthly debt. As an example, to qualify for a loan, lenders may require ratios of 28% or 36%. This means you can spend up to 28% of your gross monthly income on a mortgage payment, and no more than 36% of your gross monthly income on all forms of debt, mortgage included.

The first step is to determine current mortgage interest rates. You can typically do this with a couple of phone calls to lenders or some quick looking on the internet.

We work with a number of loan officers and would be happy to recommend one right for you. 

You can Save Thousands On Interest & Taxes
Purchasing a home can save you money very quickly. FIRST you'll save on taxes because the interest on your home mortgage is tax deductible. If you rent, your landlord gets the break.

Second, you'll save on interest payments while keeping the great tax advantage. Paying rent is like throwing your money out the car window each month. You pay it out and never see it again. With home ownership, you receive loan interest write-off, and gain money over the years from the increased value of your home. Over a ten year period, on an initial purchase price of $100,000, you could gain over $100,000 in tax advantages and appreciation based on an 8% mortgage interest rate and 5% per year increase in home values.

For example if you are paying $900 per month in rent, you are paying a portion of this towards your landlord's property taxes and mortgage loan interest. Your landlord can write this amount off. You derive absolutely no tax break. When you own a home, you now reduce your taxes for the mortgage interest and for your property taxes. Your interest is always the highest during the early years of your loan, so your overall write-off is largest during these early years.

On both the 15-year and 30-year loans, your interest deduction is highest in the first few years of the loan, so your tax deduction is highest then, too. Remember, if you plan to move or refinance after 5 years, you will maximize your tax deductions. Keep in mind that as you pre-pay part of your loan to reduce the interest expense, you also reduce your tax deduction. How long you plan to keep your current mortgage loan can help determine which type of loan, and which payment strategy, is ideal for you.

To find out more about how you can find a home you can afford, contact us today!

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Contact Information

Photo of Masha Halpern - Boutique Real Estate Real Estate
Masha Halpern - Boutique Real Estate
Keller Williams Realty
101 Cosgrove Avenue, Suite 200
Chapel Hill NC 27514
Direct 919-951-1780
Toll Free 877-478-4669
Fax: 919-928-9030




Masha Halpern of Keller Williams Realty provides real estate services in the Chapel Hill, Carrboro and Durham, North Carolina area including real estate services for buyer, sellers and those relocating to the surrounding areas of Apex, Bahama,Cary, Efland, Hillsborough, Holly Springs, Mebane, Raleigh, and Wake Forest. Search for homes in Chapel Hill, Carrboro, Durham or the surrounding communities.  Request a market analysis for your North Carolina property.  I list and sell residential real estate, investment property, vacant land, lots for sale in Chapel Hill, Carrboro and Durham, North Carolina area.

Chapel Hill, Carrboro and Durham, North Carolina real estate and homes for sale in North Carolina - Masha Halpern & The Smart Move Team

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