You get excited about purchasing a property and start looking right away, but hold on – do you know how much house you can afford?
I see this all the time. Someone gets the investing bug (and rightfully so) and goes full steam into looking at properties before they get an idea what they can afford.
Don’t Put the Cart Before The Horse
In nearly all of my posts, at some point I talk about running the numbers on a property to ensure you buy right.
Well, before you can do that you need to know what price point you can afford. Unless you are buying a property with cash then you need to talk to a lender and see what kind of loan you qualify for.
There are two ways to go about this:
- Preapproval or Prequalified
I want you to understand the difference between the two:
A prequalification basically provides a number the bank thinks they will lend you based on the information provided.
The Preapproval is the amount the bank will lend you.
With that said, one is much easier and quicker to obtain than the other.
For full details on what you need to do for a prequalification or preapproval see the whole article here: https://scaredycatguide.com/know-how-much-you-can-afford-before-looking-for-properties/
Best Regards,
Thank goodness that am into crypto ...steem will take care of the payments ...hopefully from next year ...hiyaaaaaaaaa
However good post
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Good tip, this is what I did when I was looking to buy a house. I believe I may have also received an estimate of closing costs and real estate tax/insurance payments (above-beyond the mortgage cost), which was helpful, it was all much more than I would have guessed!
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Nice man! Yeah, the tax estimate is usually higher than people expect as taxes generally go up on sale (assuming the purchase price is higher than the previous sale).
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Ugh yes towns and their re-assessments! State aid from their budget also plays into the mill rates (and then the state budget from the federal budget).
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Nice tips, i'll try to remember these when I buy a house and will check out the rest of the article as well, good job and thanks for sharing!
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My pleasure, hope it helps!
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I'm curious how many approvals are human-based and not computer-based.
Naturally pre-approvals are often computer based.
But I have to wonder how much a computer decision is involved.
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Yes, or more so a human plugging in the info you tell them and it giving them a decision that then tell you lol.
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@saredycatguide What to you is the "most" important thing in buying a house...? I say location.
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Location is always an important piece, but it also depends on the goals and whether its for investment or occupancy.
One big thing I look at is population trends in an area. I also look for price history of properties in an area along with employment rates (when it comes to rental property)
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Got ya. Thanks
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upvoted
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Yes, we must find out whether we are going to buy a right property of letication one and need to check the prices in the market. 6 months back my friend recently brought a flat for $150000 Now it's value is around $75000. He lost more than $75k.
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Ouch, yeah that is what one wants to avoid. I preach "buy right" to people on my website all the time. What Country/City is that flat in?
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India my friend
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It is true, before investing we have to take into account many factors to not lose money, the idea is not to shake your head and now, the idea is to do it smartly
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