"Door County Real Estate" by: Kevin Nordahl, REALTOR®
How Much House Can You Afford?
As the search begins for most Door County home buyers the big question of how much to spend on their investment can sometimes be as overwhelming as the prices being asked for. Savvy buyers strike a balance between their passions of ownership and the reality of their bank accounts before they step foot into a real estate office.
Getting pre-approved for financing before looking for a first or second home is one of the most important and stress relieving preparations a buyer can make. There are a number of expense calculators online that will evaluate gross living expenses against personal income to arrive at a reasonable purchase budget. Knowing the sales history of a given market is the next best thing. This will alleviate wasting time on properties that are not a sensible match financially.
When it comes to second homes, there are a number of budgeting issues that many buyers often forget to consider such as traveling expenses, property maintenance and the costs associated with rural living such as septic maintenance and satellite television. Having answers to the following list of questions will be essential to completing any financial modeling worksheet (online or otherwise).
What is your gross monthly income?
What is your monthly debt payment?
What is the estimated monthly real estate tax and homeowners insurance payment?
Are there any homeownership association dues? If so, how much and how often is it due?
Will mortgage insurance be necessary? If so, how much will it cost?
Will the property you are looking at qualify for a fixed-rate or variable-rate mortgage?
How much is the current interest rate for that type of loan?
How long a term would you finance your home?
How much would your down payment be?
Additional hidden costs might include:
How much would you spend on traveling to/from your second home?
Would you hire a property manager? If so, how much would that service cost?
This is a generalized list of items to consider when it comes time to evaluate how much money to spend on a home. Having this work completed prior to even stepping foot into a listed property will bring the satisfaction of truly experiencing the property for what it is, in addition to brining a well researched estimation of what type of expenses and liabilities to expect. Completing a worksheet prior to considering your next move will save everyone involved a great deal of time and anxiety. The following Internet site is a good place to start. Good luck and happy house hunting!
Kevin Nordahl is a life-long resident of Door County, a REALTOR® and a member of the Door County MLS. He is a Past President of the Door County Board of REALTORS® and a Senior Sales Consultant at Coldwell Banker Door County Horizons in Fish Creek. He may be reached online at knordahl@doorcountyrealestate.com or by phone at (920) 493-4004.
Kevin Nordahl is a life-long resident of Door County, a REALTOR® and a member of the Door County MLS. He is a Past President of the Door County Board of REALTORS® and a Senior Sales Consultant at Coldwell Banker Door County Horizons in Fish Creek. He may be reached online at