SCRIPT: HOW MUCH HOME CAN YOU AFFORD?

HOW MUCH HOME CAN YOU AFFORD? CLIENT FACING SAMPLE VIDEO

VIDEO SCRIPT

Hey guys! [JOE AGENT] with Berkshire Hathaway HomeServices PenFed Realty Texas & I wanted to address a question I get a lot from clients when they are beginning their home search. The question is “how much home can I afford” & knowing the answer is essential before beginning to look for your new home.

People often make the mistake of only looking at the monthly payment amount based on a sales price & not factoring in other monthly costs that come with home ownership. Of course, the starting point is always working with a lender to see exactly what you are qualified for. The initial make-up of this number is based on 3 things, your credit score, your debt to income ratio and how much you have for a down payment.

Typically, a lender will require a minimum credit score of at least 620-630 & the higher your score, the better the interest rate on your loan. For your down payment, you can avoid PMI, which stands for Private Mortgage Insurance, by providing at least 20% on your home purchase.

After looking at your credit score & understanding your down payment potential, your lender will then look at your debt to income ratio. How much money do you have coming in compared to your monthly bills? Your debt includes balances on credit cards, car & student loans, medical bills & other monthly costs of living. Additionally, they will also look at your employment status. Being a w2 employee versus a 1099 could have a big impact on your loan.

Once you’ve hammered out all the details with your lender & have a number of what you can afford, then it’s time to start looking. It’s important to remember that taxes in Texas can very widely from city to city. For example, a $350,000 home in one city could add more than $2200 in your annual expenses compared to a neighboring city.

Equally important, HOA fees can vary from non existent, to voluntary to fairly expensive based on the amenities provided. We will keep all of this in mind when we start your home search.

Your buying power is based on more than the home price, but also on your credit score plus taxes and hoa expenses. Putting in the work up-front with a lender to get a solid understanding of what is within your financial reach makes for a much smoother & enjoyable buying process.

If you have are ready to find out how much home you can afford, give me a call & let’s get searching!