Many buyers focus on the price they wish to pay on a house, or they 'hold out' until the market hits rock bottom, but this can have such a negative impact on your overall financial situation if you are seeking financing.

Price:

The price of a home is the actual purchase price. The purchase price should be determined by the worth of the home which is determined by comparable homes that have sold within the last 6 months.

Cost:

The cost of a home is the monthly mortgage payment. This includes principle, interest, taxes, insurance, and mortgage insurance.  When determining your house budget, first figure what you can comfortably afford monthly and that will determine your purchase price budget.  As illustrated below, in 2007 a buyer with a $1,000 monthly budget could afford a home priced at $154,972. A buyer with the same monthly budget in 2010, could afford a home priced at $192,813.

Year               Price               Interest           Cost

1995          $121,021            9.3%             $1,000

2000          $137,588            7.9%             $1,000

2005          $161,558            6.3%             $1,000

2007          $154,972            6.7%             $1,000

2008          $152,611           6.85%            $1,000

2009          $170,429           5.8%              $1,000

2010          $192,813           4.7%              $1,000

With the current interest rates, can you afford not to buy?

Call to find out what the rates are today.  801-694-3804.