Are you planning on buying a home in Auburn or buying a home in Opelika? If so the first step to purchasing a home is to obtain a pre-approval letter from your lender. The pre-approval letter will tell you exactly how much the bank will lend you to purchase your new home.
Have you ever experienced sticker shock when going to buy something? For many people, it happens with larger purchases, like buying a car. When it comes to shopping for a house, most folks have an idea of what they can afford as a monthly payment, but they may get sticker shock on the cash required to close (i.e. down payment and closing costs).
While the bank calculates both your front-end ratio (typically 28% of your gross monthly income) and your back-end ratio (typically 36% of your gross monthly income minus your monthly recurring debt), they use the smaller of the two numbers as your maximum amount towards PITI (monthly payment, interest, taxes, and insurance). Even if this amount is higher than what you’re paying monthly in rent, you would still need to consider the mortgage interest deduction you’d be getting at tax time.
So, besides running these numbers, what else can you do to get ready to purchase your first home?
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For all of your real estate needs in the Auburn-Opelika area please contact me at (334) 332-7263 or email me at LauraSellers01@Gmail.com or visit my website. I look forward to helping you buy the home of your dreams or sell your existing home. Search for Auburn homes for sale or Search for Opelika homes for sale here.