Ask an Expert Q&A
This month's question asks, "I am thinking of buying a home. How do I know what size mortgage I can afford?"
Response: "You should sit down together and discuss what you intend to spend on a home. What are your non-negotiables, like the number of bedrooms, bathrooms, and amenities, and what you can live without or add later?
When you start to save you not only want to set up a separate account to put that money in, but you need to treat it like a bill and pay it every month. You also want to monitor your credit score and care for it by ensuring that it stays in good standing since this can affect your interest rate on what you finance. Depending on how you finance a mortgage will dictate how much you will save up. Some loans require less, or in a few cases, no money down.
The best advice I can give is to find a banker you trust and share your vision with them and let them help you achieve it. You also must be willing to see the big picture. You may need to make some sacrifices in the short term in order to afford the home of your dreams! Also, do not forget to save up for a lawn mower. You almost always need one of those right away! -Michelle Casady, Area Manager, Northwest Bank
"The best advice I could give, without knowing budgetary restrictions, is to save something, or as much as possible, from every paycheck and put it in a secondary savings account to be used strictly as savings towards the home down payment. Amounts can vary vastly dependent on family finances.
Fifth Third Bank does offer 100% financing options, through USDA and Indiana Housing, these programs are income based. With rent prices on the rise every year, it is very probable that many people could easily purchase a house at 100% financed and still be paying less than they do in rent each month. Plus, they would be building equity in themselves each month vs. their landlord. If they have concerns about credit establishing or credit rebuilding, we do have a secured credit card that can help build their credit score that only requires a $300 deposit to their savings account to start out.
-Amy Palmer, Officer & Financial Center Manager, Fifth Third Bank
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