How Much House Can You Afford?
Excited to start shopping for townhomes in Chattanooga TN? Of course you are! But first you need to know exactly how much you can spend on a home. Buying a home you can truly afford will make your life better now and in the long run.
So, how do you figure out how much you can spend on a house?
Monthly Income and Expenses
Start by looking at exactly how much money you bring in each month. If you have a spouse or partner who’ll be contributing to the house payment, include their income as well. Next, outline your current monthly expenses, from food and utilities to car payments, child care and retirement contributions.
How much are you currently spending on housing costs, including rent or mortgage, property taxes and insurance? Do you have room to spend more? If not, can you cut back on other expenses or find a way to increase your income? For all-around financial health, your total housing costs should be no more than about 25% of your net income each month.
Down Payment
The more you put down on a house, the lower your monthly payments can be. If you put down 20% or more, you won’t have to pay Private Mortgage Insurance, or PMI. That can save you thousands of dollars every year.
Alternative Mortgages
Having trouble qualifying for a conventional loan? Look into alternative mortgages that can get you lower payments and low or zero down payments. Ask your lender about FHA or VA loans and special programs for first-time home buyers.
Wise Purchases
Resist the temptation to buy a house at the very top of your budget. Leave yourself some breathing room! You can always move up in house after you gain some equity in your current home. That equity translates to cash when you sell the house. Now you can increase your next down payment and maybe even get a smaller mortgage.
Consider a Townhome
A great way to save money on housing costs is to buy a townhome. Townhomes are affordable, low maintenance and easy to care for. They’re perfect for young professionals, single parents and downsizers.
Want to check out stylish, modern townhomes in Chattanooga? Come see River Stone Construction’s new townhomes in The Eleuthera. We have one and two story homes starting at $269,000. Community amenities include a brand new dog park!
Call River Stone Construction today at 423-954-7550 to tour this beautiful community of affordable townhomes in Chattanooga TN.
