Do the math on a real estate purchase

Mood of the Market

By Inman News Feed
Add Comment Add Comment | Comments: 1 | Posted Jan. 24, 2011

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  • Specifically, get clear on: your personal income and expenses on a monthly basis and how you see them changing (increasing or decreasing) over time, and when.
  • Specifically, understand what you can afford to spend monthly on housing and housing-related expenses.
  • Specifically, do the math on exactly how much cash you can afford to put into the deal, total.
  • Specifically, tell your mortgage professional and real estate representative what you can afford in terms of down payment and closing costs (one number) and monthly payment (another number) -- and then ask them to tell you what that translates to in terms of a maximum purchase price for your home.

Unless you are in the very rare position of being able to reliably predict a quantifiable increase in your income over time, get a mortgage that has payments that will stay constant over time -- today's market is just too volatile and unpredictable to plan for appreciation to power your ability to refinance in any short-term time frame.

And then come back next week, when we'll cover the next to last of my moral imperatives for resetting your approach to real estate.

Tara-Nicholle Nelson is author of "The Savvy Woman's Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Tara is also the Consumer Ambassador and Educator for real estate listings search site Ask her a real estate question online or visit her website,

Contact Tara-Nicholle Nelson:
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1. Tampa Real Estate said... on Feb 3, 2011 at 01:48AM

“In This Market Real Estate is good for all Try one of our mortgage calculators. They can do the math for you.”


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