It’s crucial to be realistic about what you can afford. As a general rule, a person can typically afford a home worth about three times their annual household income. (If your combined income is $50,000, you can afford a $150,000 home.) But be aware that the amount of outstanding debt that you need to repay for credit card charges, educational loans, vehicle loans and other current liabilities, the size of the down payment you can make, and your credit score all play into how much home you can actually afford.
What to Know When Buying a New or Renovated Home
Buying a home is a huge undertaking, and it's easy to get wrapped up in the excitement of it all. Before taking the plunge into the Land Bank buyer pool, consider the following
- Consider how much you can comfortably pay each month considering these factors:
- The bigger the down payment, the lower your monthly payments.
- The lower the interest rate, the lower the monthly payments.
- The longer the loan period, the lower your monthly payments. The shorter the loan period, however, the less overall interest you pay, but your monthly payment will be higher.
- There are many on-line calculators that can help you to estimate the payment such as https://www.bankrate.com/calculators/mortgages/new-house-calculator.aspx.
- Consider the amount of money you will need up front. A typical down payment is 3% to 20% of the purchase price. The actual amount depends on your lender’s loan type and your credit score.
- Closing costs typically run between 1% to 8% of the purchase price. You may pay this up front, or the bank may be willing to fold the costs into your mortgage, but this will slightly increase your monthly payment.
- Additional fees can run up to $1,000, including the loan application fee, credit report fee, inspection, and appraisal costs.
- If you are a first-time homebuyer also factor into the amount of upfront cash that you will need the cost of moving expenses and the cost of outfitting your first home. There are many on-line resources that provide lists of items you are likely to need ranging from tools to snow shovels to lawn mowers to window coverings and so forth.
Approach a lender and find out if you pre-qualify for a mortgage. Generally, you will need four things to qualify: cash for the down payment, income three times higher than your mortgage payment, two years of stable employment history (same job or field), a credit history, and a credit score at a minimum of 580.
If you pre-qualify, then browse through our inventory of homes for sale, schedule viewing(s) and select a home that meets your needs and budget.
Select a title company or ask your mortgage lender to refer you to one.
Make us an offer and, once it is accepted, enter into a contract with the Cuyahoga Land Bank.
Complete the process with your lender of gaining approval for your loan application and closing on your mortgage.
Move in and enjoy your new home!
Attention: Please note that the steps to purchasing a home may vary depending on a buyer’s individual circumstances.
To begin the process of purchasing one of our new or renovated homes, click on a property listing to find the contact information for the listing agent.