Just Completed New Home by Nova Homes of South Florida
From an article by Roger Ma for Forbes
Do You Have The Money?
Important is whether you have sufficient upfront and ongoing funds to pay for a place you would want to live in. Upfront costs include the downpayment and closing costs, but money should also be set aside for an emergency fund.
On an ongoing basis, you’ll need to know if your salary is enough to comfortably pay a mortgage, homeowners insurance, homeowners association fees (HOA fees, if applicable), and taxes. Financial planners like to see ongoing housing costs less than 28% of gross income and total debt less than 36% of gross income. If you’re more serious about buying a home, you may want to get a mortgage pre-approval, which is more involved than a pre-qualification – you typically complete a mortgage application, your personal information is verified with relevant documentation (e.g. paystubs, tax returns, bank statements), and your credit is checked.
No matter what type of mortgage pre-work you do, Bob Johnson, president and CEO of The American College of Financial Services, says to be careful with how you use the estimated loan amount you’re given. Don’t stress about figuring out these answers alone though. A quick call with a real estate agent or your homebuilder can give you a good understanding of if you have enough upfront and ongoing money to buy a home. If it turns out you don’t have sufficient funds currently, meeting with a financial planner could help you put a plan in place to save enough money for a future purchase.
Priya Malani, co-founder of financial planning firm Stash Wealth, says, “When we create a financial game plan for millennials, a home purchase is almost always the first thing we are helping them plan for. While a 20% downpayment is more standard, if a client is in good standing, we can usually employ a creative strategy, which includes the ability to put down 10% instead.”
“Too often, individuals get pre-qualified for a mortgage loan amount and then use that to determine the price range of homes to examine – or often they go a little beyond that price,” explains Johnson. “That is, they anchor their expectations with the maximum house they can afford instead of the amount of house they need.”
Nova Homes of South Florida will lead you through the process of financing your new home, if you are not paying cash.
Select from 15 proven floor plans, customize any plan, bring in a plan of your own, or they will design from scratch. For more information please call 239.307.6116 or visit www.novahomesbuilder.com