Buying Your Home - What You Can Afford

Real estate agents would say that the more you tell them, the better they can negotiate on your behalf.  Agents working for buyers have several  possible choices:  (these are just a few) They can represent the buyer exclusively, called buyers agency, or exclusive buyer agency.  Or Dual agency, or represent both the buyer and seller.  Agents  disclose all possible agency relationships before they enter into a residential real estate transaction. Here is a summary of the three basic types:
* In a traditional relationship, real estate agents and brokers have a fiduciary relationship to the seller. Be aware that the seller pays the commission of both brokers, not just the one who lists and shows the property.
* Agent works for buyer and seller at the same time. Dual Agent obligated to seller in the same manner as a seller agent and is obligated to a buyer in the same manner as a buyer agent.  (see form) 
* A buyer also can hire his or her own agent who will represent the buyer's interests exclusively. .

How much will I spend on maintenance expenses?
Experts generally agree that you can plan on annually spend 1 percent of the purchase price of your house on repairing gutters, caulking windows, sealing your driveway and the myriad other maintenance chores that come with the privilege of homeownership.  Some times newer homes will cost less to maintain than older homes. It also depends on how well the house has been maintained over the years. Home inspectors are best  to give you the individual details on each individual home you may want to purchase.  So you can get the facts about each home. 

What is the standard debt-to-income ratio?
A standard ratio used by lenders limits the mortgage payment to 28 percent of the borrower's gross income and the mortgage payment, combined with all other debts, to 36 percent of the total. The fact that some loan applicants are accustomed to spending 40 percent of their monthly income on rent -- and still promptly make the payment each time -- has prompted some lenders to broaden their acceptable mortgage payment amount when considered as a percentage of the applicant's income.  It is really important to get a pre qualification letter from a local lender. I refer Tami Hartmann at Stockman Bank. You can go in to visit with her and or e mail her for a pre qual letter on line.;

thartmann@stockmanbank.com  phone 896-4812 402 N. Broadway Billings   

What can I afford?
Know what you can afford is the first rule of home buying, and that depends on how much income and how much debt you have. Get prequalified with a local lender: I use Tami Hartmann at Stockman Bank    thartmann@stockmanbank.com. You can pre qualify on line. 406-896-4812. You can use any lender you wish, this is just a suggestion.  The price you can afford to pay for a home will depend on six factors:
1. gross income
2. the amount of cash you have available for the down payment, closing costs and cash reserves required by the lender
3. your outstanding debts
4. your credit history
5. the type of mortgage you select
6. current interest rates

Another number lenders use to evaluate how much you can afford is the housing expense-to-income ratio. It is determined by calculating your projected monthly housing expense, which consists of the principal and interest payment on your new home loan, property taxes and hazard insurance (or PITI as it is known). If you have to pay monthly homeowners association dues and/or private mortgage insurance, this also will be added to your PITI. This ratio should fall between 28 to 33 percent, although some lenders will go higher under certain circumstances. Your total debt-to-income ratio should be in the 34 to 38 percent range , or lower!

When is the best time to buy? Any time in Billings MT!
 We have limited inventory at this time. And a very very strong real estate market. Always a good time to buy and sell. 

Here are some frequently cited reasons for buying a house:

* You need a tax break.   Great  way to establish credit.

*You need more room, or need to down size.

*Looking for a long term investment. 

* The home belongs to you - you do not pay someone else's mortgage.

*You normally  earn  equity in real estate. Increase in value. 

* You prefer to be an owner rather than a renter. 

Where do I get information on housing market stats?
I can help you with  the status of the local Billings Montana  housing market.  I can complete a free market analysis on your existing property and or home, ranch , multi family unit etc... 

For Billings  overall housing statistics, I can provide you a FREE  market analysis from the Billings Board of realtors - on a monthly and annual basis. 

Check with your lender;  They will provide you  with all the aspects of what loan may work for your financial situation. They can purchase loans in house or sell to the 2nd dairy market. Ask them for the up dated information on home loans that may fit your  financial situation. 

 Each individual  buyer and seller has specific needs, check with your local lender. Do not get discouraged.   I can help you with this entire process - from start to finish :) I use Tami Hartmann at Stockman bank to pre qual 406-896-4812