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Five Tips For Estimating How Much You Can Afford For A New Home



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In beautiful Chula Vista, homes fitting nearly every taste are available on the market. As such, it’s easy to get carried away with dreams of making your first real estate purchase in the most desirable neighborhoods. Before you go any further, however, you will need to make a couple important calculations, familiarize yourself with the housing market, understand the costs involved and get a sense of what homeownership is like. Here are five tips to help make sure you purchase a home that fits within your budget.

1. Sit Down and Budget

First of all, you need to figure out how much cash you can come up with for a down payment. You’ll need at least a 5% down payment to secure a mortgage loan, but larger down payments are recommended whenever possible. Then you’ll need to calculate a monthly budget. When you are no longer paying rent and you have eliminated any unnecessary bills, what will be left for the mortgage payment and other fees?

2. Be Realistic about Your Resources

If you’re shopping around in Chula Vista, homes you love have probably already caught your eye, but it’s unwise to get carried away before speaking with a professional. You might be setting yourself up for disappointment. Get a few estimates from lenders to see how much you can afford to borrow, and avoid looking at properties that are out of that range.

3. Prepare Yourself for Homeownership 

There is a myriad of additional costs that come with homeownership that you must be aware of. Here are a few additional fees you will encounter:

  • Closing costs will come to about 2-5% of the total purchase price.
  • If your down payment is less than 20%, you need private mortgage insurance.
  • Home maintenance is completely the owner’s responsibility, e.g. gutter cleaning, lawn care, repairs and renovations, replacing old systems and appliances, sewage, termite inspections, water service, etc.

4. Think about the Future

Part of being realistic about and prepared for homeownership is imagining yourself in the future, after buying a home that you are interested in. You might think to yourself, “I’ll make it work,” when you see a gorgeous home in the perfect neighborhood, but will those numbers really work once you’re stuck with a mortgage you can’t afford for years to come? Before buying a home, try living as if you’ve already bought it for three months, and see if you can realistically live with that payment.

5. Set Your Sights at a Reasonable Level

When looking at homes, it may actually be better to start with homes that are below your budget limit, and keep an open mind. Then you can only go up from there, and you are more likely to find a home that fits within your budget without being too disappointed.

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Team Ratcliffe - McMillin Realty

My husband and I met Matt Gover of Team Ratcliffe at an open house and instantly liked his demeanor and over time his work ethic. He became our agent., and for nearly a year worked tirelessly with us to find the perfect home, not easy in todays market of multiple offers and cash buyers. His hard work and dedication to us and our search paid off. We are now enjoying our beautiful home. We can't thank him and Pam Ratcliffe enough for going the extra mile to help us close the deal.

So if you're looking for a truly dedicated and professional Team look no farther then Team Ratcliffe, Thanks a milliom Matt, Pam and Joe! We really miss seeing you guys. ----Laura and Jim B, 5/25/2010

My husband and I are both first time home buyers and we went through 2 other realtors before we found team ratcliffe. We worked with Joe primarily and with Pam during the escrow process. They are extremely professional and friendly, they are easy to get ahold of and willing to answer any questions you have. They also have a reference to just about anything and everything you could need a reference for. We hit about a million bumps in the road, and ones that our past realtors couldn't get us over, and we still made it out on top. They are very willing to fight for you when they need to and they make you feel like you matter as a person and not just as a paycheck. I would recommend team ratcliffe to everyone and I plan to go back to them when we sell our house! ----Krisitin S, 7/5/2010

My short sale experience was made so much easier by Joe; through thick and thin, he was willing to stick it out to get the deal done. He was a lot patient than I was and worked hard to get the negotiations done with the banks. There are a lot of realtors out there but Joe was the first one who I felt was exceptional. ---- Aye T, 5/19/2012