Eight Steps to Finance Property
2. Housing Budget
During the loan pre-qualification process you will discuss what monthly Housing Budget you can
comfortably afford. The budget will include an amount for the mortgage itself, an amount for
annual property and fire taxes and for property insurance. Frequently, home buyers "qualify"
for more house than they can actually afford to pay for.
It's important that YOU tell the Lender the maximum loan payment (including taxes and insurance) you are comfortable with - and that will determine how much you can pay for your property.
Tax Advantages: There are substantial tax savings when you own your own home. You can deduct your property taxes, insurance and up to 100% of the interest you pay as part of your mortgage (often thousands of dollars). So, much of the money you pay as part of your mortgage payment, is deductible on your tax return. That helps you to "afford more house".
CAUTION – Do Not make ANY purchase that will absorb your available cash (some of which you may need at closing) OR, buy ANYTHING on payment terms before you close on your property. It will change your credit score and may make you ineligible to purchase.