Many people I talk to have started their search for a new home by either Googling “Homes in Norman” or going to Zillow or Realtor.com. These options are all fine if you are just trying to get an idea of what is out there, but the most important question that any of those site will ask you is What is you min and max price?
Well this is where most people just pick a number that sounds right to them without much thought to what it means. But, the important thing to realize is that the easiest way to hone in on your search is to know your true (1) purchasing power and (2) what you are comfortable paying
1. Know your purchasing power
Many local lenders will lead you through a quick pre-approval process to give a you a ballpark figure of what you can afford to borrow (purchasing power). They calculate this amount with some simple metrics including your household income and debt obligations (car loans, credit cards, and other loans). You will be amazed at how much stress will be taken out of the search once you know your purchasing power and then you can just focus on the fun part of seeing houses.
Here are some awesome lenders here in Norman and no I don’t get paid for recommending them:
- Terry Teel | Bank of Oklahoma | 405.366.3629 | tteel@bokf.com
- Nikki Sorrells | Republic Bank & Trust | 405.579.5438 | nsorrells@rbt.com
- Cheryl Koontz | First United Bank Mortgage | 405.364.0101 | ckoontz@firstunitedbank.com
2. What are you comfortable paying
As explained in a previous blog post, house payments are made up of principal, interest, insurance, and taxes. Many people know what they are comfortable paying for a house per month, but not so much based on the total price. The hard part of estimating monthly payments is that interest rates change, and insurance and taxes vary from house to house and based on purchaser credit. But below I gave some estimates (these are just estimates) so you might be able to look at a house price and know about what you are going to end up paying per month if you borrow money.
**Note: If you are borrowing via an FHA loan (which must be less than $275,000) you have to pay private mortgage insurance monthly
*Please keep in mind that these are just estimates and you should consult your lender or a Realtor so they can find a more specific estimate based on your specific situation
Thanks for taking the time to look at this and please let me know if you have any questions or comments and feel free to send me some real estate questions you would like me to address in future posts.
Mitch Biesemeyer | Weichert Realtors, Centennial
Norman, OK | 405.360.0303 | Mitch@WeichertOK.com
Buying and Selling Norman 