Figuring Out Whether You Can Afford That Home

House hunting can be a brutal affair, particularly if you don?t know what you can afford before hand. No your price range in advance and you can avoid looking at really nice homes you?ll never get. .

Mortgage ? Monthly Payments

The biggest costs associated with owning a home is the mortgage. Unless you are filthy rich, you are committing to apportioning a significant amount of your monthly income to that dream home. In evaluating whether you can afford the mortgage, you need to consider the difference between the mortgage payment and what you are currently paying.

If it is a significant step up, will you be able to pay it now and in a few years? Under no condition should you assume you will be making more money in the future. Base everything on what you are making now.

When considering monthly mortgage payments, you also need to factor in the type of mortgage. Interest rates have been at historical lows for some time, but are starting to creep up. If you are taking the plunge on an adjustable mortgage, will you be able to make the payments if the interest rates increase over the next few years? In coming to a conclusion on this, you should assume the rates going up to the caps indicated in the mortgage for the relevant period of time. Again, you don?t want to get stuck in a financial bind because you let your eyes overrule you brains when selecting a home.

Other Expenses

The pride of homeownership comes with a few extra costs. In gauging affordability, many homebuyers fail to take into account the twin evils of property taxes and homeowner?s insurance. The expenses associated with each of these necessary items can be surprisingly high. In some states, property taxes can be an ugly surprise the first year of homeownership. Much like taxes, they are collected in a lump sum and can be thousands of dollars. If you fail to plan for them, your finances can become unbelievably strained.

Buying a home is absolutely the best move you can make if you?re renting. Just make sure you can meet those payments without losing sleep.

Posted by Sherald Butler on December 13, 2008 at 12:00 AM

About Sherald Butler
Sherald Butler is affliated with Century 21 SoWesCo Realty, which is located in Farmington, NM. For further assistance please use the contact information located on the right.

As of 05/24/12 the Sherald Butler RePage is ranked at 8,637 with 315 points.

Local Information for Farmington, NM

Latitude: 36.751549 -- Longitude: -108.189768

ZIP Codes for Farmington, New Mexico	87401 87402 87499
Area Code for Farmington, New Mexico	505
Time zone for Farmington, New Mexico	MST

Other Area Cities: Shiprock, NM Farmington, NM

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Farmington (Navajo: Tótah) is a city in San Juan County, New Mexico, United States. It is the principal city of the Farmington, New Mexico Metropolitan Statistical Area. It is a hub for much of northwestern New Mexico and the Four Corners region. Farmington is located at the junction of the San Juan, Animas, and La Plata rivers, on the Colorado Plateau in the northwest part of the San Juan Basin. Primary industries are natural gas, coal, and oil. Major coal mines are operated by BHP Billiton 25 to 30 km (15 to 19 miles) southwest of Farmington, and the coal is used for nearby electric power generation at the Four Corners Power Plant. A new coal-fired electric power-generating plant has been proposed in 2006 for the same area. The site for the proposed plant, part of the Desert Rock Energy Project of Sithe Global Power, LLC, also is within land of the Navajo Nation. Environmental effects of such plants have been controversial, in part because of possible problems of air-quality. -- Source: Wikipedia.com

New Mexico 2000 Census Population Profile Map

	Farmington	New Mexico	United States
Population	37,844	1,819,046	281,421,906
Median age	33.6	34.6	35.3
Median age for Male	32.3	33.4	34
Median age for Female	34.7	35.6	36.5
Households	13,982	677,971	105,480,101
Household population	37,335	1,782,739	273,643,273
Average household size	2.67	2.63	2.59
Families	10,099	466,515	71,787,347
Average family size	3.13	3.18	3.14
Housing units	15,077	780,579	115,904,641
Occupied units	13,982	677,971	105,480,101
Vacant units	1,095	102,608	10,424,540

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Figuring Out Whether You Can Afford That Home

Local Information for Farmington, NM

Latitude: 36.751549 -- Longitude: -108.189768

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