Find everything you need to know in our FAQ section. Whether it’s about buying, selling, renting, or our services, we’ve got clear and concise answers to help you every step of the way.
Your budget depends on your income, expenses, and credit profile. A mortgage lender can help determine your price range.
Income-to-Debt Ratio (DTI) Lenders typically look at the front-end DTI (housing expenses like mortgage, taxes, and insurance relative to gross income) and back-end DTI (all debts, including housing, relative to income).
A common rule is: Front-end DTI: Housing expenses should be no more than 28% of gross monthly income. Back-end DTI: Total debt payments should not exceed 36%-45%, depending on the loan program.
2. Income Calculation
Monthly gross income: $15,000 (your household income, as per your saved information).
28% rule for housing: $15,000 × 0.28 = $4,200/month for housing costs.
36% rule for total debt: $15,000 × 0.36 = $5,400/month for all debts.
3. Down Payment
The size of the down payment affects affordability and mortgage terms.
Conventional loans: Typically 5%-20% down.
FHA loans: As low as 3.5% down.
VA loans: Often no down payment for eligible buyers.
4. Loan Term and Interest Rates
Current interest rates significantly influence affordability. Lower rates mean more house for the same payment.For example, at a 6.5% interest rate on a 30-year fixed loan with a $4,200 housing budget, you could afford a loan around $620,000–$650,000, assuming a 20% down payment.
5. Other Considerations
Property taxes and insurance: These vary by location and must be factored in.
HOA fees: For condos or communities with amenities.
Credit score: Affects loan approval and interest rates.
Yes there are:
1. Closing Costs Amount: Typically 2%-5% of the loan amount.
What’s included: Loan origination fees
Title insuranceAppraisal fees
Escrow fees
Prepaid taxes and insurance (escrow account funding)
Home inspection fees
2. Property Taxes What to know: Paid annually or semi-annually; often included in monthly mortgage payments.Taxes vary by location and property value.
3. Homeowners InsuranceWhat to know: Required by lenders; costs depend on the property’s location, size, and risks (e.g., flood or earthquake zones).
4. Private Mortgage Insurance (PMI)When required:If the down payment is less than 20% on a conventional loan.Costs range from 0.5%-1% of the loan amount annually.
5. HOA Fees (if applicable)What to know: Monthly or quarterly fees for condos or homes in communities with shared amenities.Can range from $100 to over $1,000 per month depending on amenities and location.
6. Maintenance and RepairsWhat to know: New homes may require fewer repairs upfront, but older homes often need updates.Plan for ongoing maintenance like landscaping, HVAC servicing, or unexpected issues like roof repairs.
7. Utilities and Moving Costs
Utilities: Electricity, gas, water, internet, etc., often start with connection fees.
Moving Costs: Professional movers, packing supplies, and transportation can add up.
8. Furniture and Upgrades New homeowners often invest in furniture, decor, and potential renovations.
9. Unexpected Costs Potential issues: Foundation repairs, pest infestations, or other problems that weren’t detected during the inspection.
Solution: An emergency fund for homeownership (3-6 months of housing costs) is a smart safety net.
Determining the value of your home depends on various factors. Here's how you can estimate it:
1. Recent Comparable Sales
("Comps")Look at similar homes in your neighborhood that sold recently (within the last 3-6 months).
Consider: Square footage, Number of bedrooms and bathrooms, Lot size Age and condition
Where to find comps: Real estate platforms (e.g., Zillow, Realtor.com) or through a licensed agent.
2. Online Valuation Tools
Use tools like Zillow's "Zestimate" or Redfin's home value estimator for a quick starting point.
Limitations: These tools may not account for unique upgrades or local market nuances.
3. Professional Appraisal
Hiring a licensed appraiser provides an accurate estimate based on:Property condition,Market trends,Comparable properties.
Cost: $300-$600, depending on location.
4. Market Trends and Location
Analyze current trends in your local real estate market.Is demand high? Are homes selling quickly?Are interest rates affecting buyers in your area?
5. Unique Features
Certain features can increase value:Renovations (kitchen, bathrooms, landscaping)
Energy-efficient upgrades,Proximity to schools, parks, or amenities
6. Real Estate
Agent’s Comparative Market Analysis (CMA)Agents use local expertise and access to MLS data to provide a detailed report.
Selling a home involves several costs beyond paying off your mortgage. Here’s a detailed breakdown:
1. Real Estate Agent Commissions
Amount: Typically 5%-6% of the sale price, split between the buyer's and seller's agents.
Example: On a $500,000 home, commissions could range from $25,000 to $30,000.
2. Closing Costs Amount:
Usually 1%-3% of the sale price.
What’s included:Title insurance for the buyer, Escrow fees,Transfer taxes (varies by location)Recording fees
3. Repairs and Upgrades
What to consider:
Pre-sale repairs to address inspection issues (e.g., roof, plumbing, or HVAC fixes).Cosmetic upgrades (e.g., painting, landscaping, or staging) to attract buyers.
Costs vary depending on the scope of work, but small updates can yield high returns.
4. Home Staging
Purpose: To make the home more appealing to buyers.
Cost: $500–$2,500 or more, depending on the size of the home and whether you rent furniture.
5. Mortgage Payoff
Ensure you account for:The remaining balance on your mortgage.Possible early repayment penalties (check your loan terms).
6.Capital Gains TaxWhen applicable: If the profit from selling your home exceeds $250,000 (single) or $500,000 (married filing jointly).
Exemptions: If the property was your primary residence for 2 of the last 5 years, you may qualify for exclusions.
7. Utilities and Carrying Costs
What to consider: Ongoing expenses until the home sells:UtilitiesHOA fees (if applicable)Property taxes
8. Marketing Costs (if selling without an agent)Amount: Varies widely.Photography and videography
Staging etc
Calculating the Return on Investment (ROI) for a property involves comparing the net profits to the total investment.
Steps to Calculate ROI
1. Determine the Total Investment
Purchase Price: The price paid for the property.
Closing Costs: Typically 2%-5% of the purchase price (e.g., escrow, title insurance, etc.).
Renovation/Repair Costs: Any improvements made to the property.
Other Costs: Inspection fees, moving costs, etc.
Total Investment=Purchase Price+Closing Costs+Renovation Costs
2. Calculate Annual Income
Rental Income: Monthly rent × 12 (if it’s a rental property).Other Income: Parking, laundry fees, etc.
Annual Income=Rental Income+Other Income
3. Subtract Annual Expenses
Operating Expenses: Property management fees, maintenance, insurance, property taxes, HOA fees, etc.
Vacancy Rate: Account for months the property might be unoccupied (typically 5%-10% of annual rent).Mortgage Payments: Principal and interest (if financed).
Net Annual Income=Annual Income−Operating Expenses−Vacancy Rate−Mortgage Payments
4. Calculate Net Profit
For Rental Property:Net Profit=Net Annual Income
For Flip or Sale:Net Profit=Sale Price−(Purchase Price+Closing Costs+Renovation Costs)
5. Plug into the ROI Formula
For a rental property:ROI=(Total InvestmentNet Annual Income)×100
For a flip:ROI=(Total InvestmentNet Profit)×
The best areas to invest depend on your goals—whether you're looking for strong rental income, long-term appreciation, or both. Generally, areas with growing job markets, good schools, and planned developments offer the most potential.
