Chuck Gulyas' Real estate Blog - March 2015
Minor rebound from January's lack-lustre start here in Lethbridge. Sales of single family homes were up 14% over February of 2014 with a total of 77 sales compared to 73. The number of SFD listings is up 14% and the average number of days to sell decreased year over year from 105 to 88. The average sale price of those single family homes however is up 7% from last February to $308,827.00. Of those single family home sales only 10% were newly constructed homes compared to 18% of all sales in January.
How Much of a New Home Can You Afford?
If you’re thinking of shopping for a new home, one of the first considerations is price range. You want to know what you can reasonably afford. How do you figure that out?
First of all, you need to determine the initial out-of-pocket costs you will need to cover. There are often more costs associated with purchasing a home than its actual price. You need to take into account such additional expenses as moving costs, legal fees, and a home inspection, not to mention the costs of prepping your current property for sale. Experts say you should budget 5-10% above the purchase price for these items. So if you can afford to spend $470K on a new home, you should be shopping in the $425-445K range.
Another factor to consider are the potential proceeds from the sale of your current home. Your REALTOR® can help you determine how much your property will likely sell for in today’s market. Any existing mortgage will need to be subtracted from that amount to determine how much cash will be left.
Of course, you should speak to a mortgage broker or lender who can compute how much of a mortgage you qualify for. Remember, qualifying for a big mortgage doesn’t necessarily mean you should have one. You also need to consider your personal finances and desired lifestyle – and whether or not having a large mortgage is a good idea for you.
Once you have gathered all of your information, you can add any potential sale proceeds to the amount of mortgage you qualify for, add other sources of cash available for this purpose and subtract 5-10% for initial expenses, and you’ll have an idea of the price range you should be considering.
From here it's just a matter of Calling your Realtor to start viewing property until you find the one that fits all of your criteria. Ready to start shopping? Call Chuck Gulyas at RE/MAX TODAY!
"Learn to trust the journey, even when you don't understand it." - Unknown