Knowing how much you can afford to pay is a crucial step in your search. Nailing down your budget early will make the overall process more focused and less stressful.
Here’s a good way to figure out how much you can afford:
The 28/36 rule is an established benchmark used by many lenders to determine how much credit to offer you. Here's how it works:
Get preapproved for a mortgage. Your lender can approve you for a certain to loan amount prior to your home search. This gives you a solid number against which you can assess the affordability of the houses you visit.
The "28" refers to the notion that no more than 28 percent of your gross monthly household income should go toward housing costs, which include mortgage principal, interest, taxes and insurance.
To calculate, simply multiply your gross monthly income (amount before taxes) by .28. Use this amount as a guide for how much house you can afford.
Example: You earn an annual salary of $70,000. Divide 70,000 by 12, giving you a monthly gross income of $5,833. Multiply that by .28, and you'll find you should spend no more than $1,633 each month on total housing costs.
The "36" part of the 28/36 rule refers to your overall debt, which shouldn't exceed 36 percent of your income. This is important to consider because other high monthly debt loads – such as car and credit card payments – impact the amount you can afford to spend on housing.
For first-time home buyers, the tricky part is knowing how much to budget for taxes and insurance. Your agent can assist you with this.
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Silver Lake Country Club is a great 9 hole golf course, situated just west of the town on Lake Park. I grew up playing this course, although it does not have any water or sand hazards, it has plenty of length at 3220 yards. A brutal stretch from hole 5 through 7. Hole 5 is a par 3 170yds, with a sloping green that makes it nearly impossible to stick the tee shot. Holes 6 and 7 par 4's boasting over 425+ yards each make for some tough pars. Overall this course is very fun to play, at some of the best prices around the Lakes Area. I encourage you to get out some day and check it out. They usually have specials if you tee off before noon on Fridays.