Buying a home is exciting, especially if this is your first time. However, knowing how much house you can realistically afford before dreaming of a new place is crucial. You might only consider the price tag, but a home purchase involves more than that. Understanding the various costs helps you make the right decision and ensures your property becomes a wise investment. Understanding Home AffordabilityUnderstanding home affordability is your first step in the quest to find a home. This involves more than asking yourself if you can pay the mortgage — you must also look at your financials. This way, you can enjoy your new home without stretching your budget too thin.What Does Home Affordability Mean?Home affordability is about balancing your dream home’s cost with your financial health. It ensures your monthly house payments are manageable based on income and debts. This helps you maintain a comfortable lifestyle while enjoying your new place.Income vs. DebtThe relationship between your income and debt is key in determining what you can afford. Lenders evaluate this through your debt-to-income (DTI) ratio, a percentage of your gross monthly income used to pay off debts. A healthy number signifies to lenders that you can manage a mortgage comfortably on top of your obligations.The 28/36 Rule and New RecommendationsThe 28/36 rule is a traditional rule of thumb for assessing affordability. This guideline suggests that up to 28% of your gross monthly income should be dedicated to housing expenses and no more than 36% to total debt service.However, a recent report from ATTOM highlights a more conservative approach, especially for average wage earners looking at median-priced single-family homes. Because house prices are rising, ATTOM recommends a maximum DTI of 28%, assuming a 20% down payment. Prices and wages can differ greatly from one area to another in Florida, so adhering to this guideline ensures homeownership does not cause financial strain.Key Factors Influencing Home AffordabilitySeveral key factors influence how much house you can afford:Home price: The starting point in your home affordability calculation is the price of the residence. While the median listing price for a house in the U.S. is around $300,000, remember that the market can vary greatly in different areas.Interest rates: Your mortgage interest rate will impact your monthly payments and the total amount you’ll pay over the life of the loan. Lower rates make homes more affordable by reducing the cost of borrowing.Realtor costs: Buying or selling a home usually involves Realtor fees, which are typically a percentage of the home’s sale price. These costs can affect the total amount you’ll spend in the homebuying process.Home inspection and closing: A home inspection is essential before finalizing your purchase to identify any issues with the property. Closing costs also add to your total expenditure, including loan origination fees, title insurance and more. It’s particularly important in Florida to consider the costs of hurricane damage and flooding inspections.Property taxes and home insurance: Property taxes vary by location and can affect monthly housing costs. Home insurance is also a must and can add to monthly expenses.Wages and credit score: Your income and credit score are critical in determining how much you can borrow and at what interest rate. Higher wages and a better credit score can lead to more favorable loan terms, making your house more affordable.How to Calculate How Much House You Can AffordMake it easy to calculate how much house you can afford by following a few simple steps:1. Do a Quick CalculationYou can quickly calculate how much house you can afford using the 28/36 rule. To get a rough estimate, calculate your monthly income by adding up your annual income before taxes and dividing by 12. Then, apply the 28% rule by multiplying your monthly income by 0.28.This figure gives you an expectation of the monthly mortgage payment you can afford. For example, say you make $5,000 per month. Multiply $5,000 by 0.28 and you get $1,400. With this monthly budget for your mortgage, you can consider the total loan amount to which this monthly payment may correspond.2. Check Your Credit ScoreAfter you’ve estimated what you can afford, the next step is to check if your credit score is good enough to qualify for a mortgage loan. A higher number indicates to lenders that you’re a lower-risk borrower, which can lead to more favorable loan conditions. The magic number is 740 or above for receiving the lowest interest rates. While securing a mortgage with a lower score is possible, you may face higher interest rates, resulting in more expensive monthly payments.Check your credit score by getting a free report each year from major credit reporting agencies like Experian, Equifax and TransUnion. You can review these reports at Annual Credit Report.com for a comprehensive look at your history and score.3. Gather Your Financial InformationIt’s important to have all your financial information at hand before approaching mortgage lenders. This includes your monthly household income, details of existing debts, and an overview of your savings and investments. Having a clear understanding of your finances streamlines the mortgage application process while accurately determining how much you can afford to pay.4. Determine Your Debt-to-Income RatioAfter gathering your financial details, determine your DTI. Lenders use this metric to evaluate your ability to manage monthly payments and repay debts. Maintaining a DTI ratio within acceptable limits is essential for securing a mortgage that aligns with your financial goals and capabilities.5. Calculate Your Home AffordabilityOnce you have a clear picture of your financial situation, you can calculate how much house you can afford. This step involves synthesizing the information you’ve gathered so far. The goal is to pinpoint your price range while keeping your finances in check.To calculate your home affordability, consider factors such as a 3%-20% down payment, interest rate, loan term, taxes and insurance. Using online mortgage calculators can simplify this process. Inputting your financial details can give you a detailed estimate of how much house you can afford. Tools like these consider current interest rates, your down payment and other critical variables to provide a picture of total affordability.Setting the Stage for Homeownership SuccessAs you look forward to finding your dream house, remember that preparation is key. Carefully assessing your finances and understanding the full scope of home affordability will set you up for a stress-free homebuying experience. With the right tools and knowledge, you’ll be ready to make informed decisions that align with your financial well-being and homeownership goals.

As summer winds down and you soak in the remaining days of sunshine, you’ll want to start thinking about preparing your vacation home for the off-season. Properly closing everything up is essential, whether you host short-term rentals or live there part time. Ensure your vacation home remains safe and secure for months of vacancy with these 10 tips.1. Make Necessary UpgradesThe off-season is the perfect time to upgrade your holiday dwelling. As life becomes more hectic and bookings slow down, you can take better stock of what you need to fix. Perhaps you’ve wanted to give the house a fresh coat of paint or renovate the kitchen. If you’re a host, imagine how many renters you’ll entice with a newly renovated home in the coming season.Hiring a property management company may also be worthwhile in taking care of housekeeping, landscaping and maintenance for you while the house is unoccupied.2. Reset the ThermostatEven Florida is known for having occasional freezes with bursting pipes, but setting your thermostat too high will result in unnecessarily high heating and cooling costs. The U.S. Department of Energy recommends programming your thermostat back 7–8˚ Fahrenheit for eight hours daily from its typical setting. Another rule of thumb is to leave it at 68–70˚ F in the wintertime.A smart thermostat allows you to manage your vacation home’s indoor temperature remotely using your smartphone. You’ll no longer have to worry about traveling to the property when the weather turns, reaping the benefits of energy savings.3. Double-Check the Windows and DoorsIt would be an unpleasant surprise to reopen your vacation home months later and find it torn apart or sheltering squatters. Checking the locks on windows and doors could be your saving grace for preventing theft during the off-season.The garage door also needs securing — approximately 9% of break-ins occur through it. Many garage door openers have a “vacation mode” you can press to prevent access from the outside.4. Unplug DevicesUnplug appliances, televisions and other devices — including alarm clocks and coffee makers — before closing up your vacation home for the winter. This will prevent phantom loads from driving up utility costs and avoid damage from electrical surges.A coffee maker isn’t going to break the bank on its own. However, when you factor in other kitchen appliances — like the microwave, toaster oven and the small countertop television — you could save $10–$20 in electricity expenses annually.5. Use Smart Home TechnologyAside from smart thermostats, there are other modes of smart home automation to help you care for your vacation property during the off-season. Smart lighting gives the impression your home is occupied by allowing you remote access to switches, deterring potential burglaries.You can also set up a smart home security system with remote surveillance and control over the alarm. Keyless door locks, motion sensor outdoor lights and security cameras are other effective technologies you can utilize during the off-season.6. Contact Your Insurance CompanyMost vacation homeowners might not consider contacting their insurance providers to let them know the home will be vacant for the coming months. However, the company might have specific demands to maintain your home’s coverage while you’re gone.There’s a good reason why homeowners insurance premiums are 2–3 times more expensive for a vacation home — there tend to be more claims during off-seasons than at a primary residence. Yet, off-season coverage usually includes fire- and weather-related property damage, theft, and loss of personal belongings. Likewise, it protects other property structures like poolhouses, docks, sheds and detached garages.7. Seal Toilets, Drains and PipesThe last thing you want is to return to your vacation home at the start of the next season, only to find your property crawling with critters. Pests and rodents find sneaky ways to enter an unoccupied house, including toilets, drains and ventilation pipes.For example, snakes may crawl into vent stacks for food and shelter, but these pipes usually connect to home plumbing fixtures. Rats may also enter your vacation home through toilets. In fact, they can squeeze their way into any ½ inch opening easily or by gnawing and climbing.Remember to close toilet bowl lids and plug sink drains before closing your vacation home for the off-season. Some people seal the toilet bowls with plastic wrap or secure mesh around ventilation pipes to close off all access points to the house.8. Store Any ValuablesMost vacation homeowners have an owner’s closet to store their personal effects for safekeeping during short-term rentals. This closet usually remains locked unless the homeowner stays at the property.Although hosts know better than to keep expensive items lying around during bookings, there may still be things you want to protect. Place all valuables in the owner’s closet during the off-season. Although you’ll take other precautions like locking doors and setting the alarm, you can never be too careful. Whatever doesn’t fit in the owner’s closet should go home with you.9. Dispose of TrashBefore vacating the property, go through the refrigerator and cabinets to ensure you don’t leave any food behind. It could be months before you return and you don’t want to find mold or foul odors.Likewise, check the garbage bins throughout each room and dispose of all trash. Even bathroom debris will attract bugs.10. Do a Deep CleanOnce you’ve finished preparing your vacation home for the off-season, give it a deep cleaning. Even if you keep up with housekeeping during your extended stay, it’s best to sanitize thoroughly — this is especially true if you’ve had short-term renters.It’s worth hiring a cleaning company to come in and do the heavy work for you. You might also want to consider bringing in another crew before you reopen the following year. Your vacation home will look and feel fresher when it’s spotless, and you can rest assured you’re closing a germ-free house.Close for the Off-Season Without WorryClosing your vacation home for the off-season may make you feel vulnerable — after all, anything can happen when it’s vacant for months. Fortunately, when you take care of the essentials beforehand, you can lock up without worry.

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