How to Determine your Purchasing Power

Looking to buy or sell a home in Northeastern Ohio? Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You may also call us at (440) 974-0404 for a FREE home buying or selling consultation to answer any of your real estate questions. 

Purchasing a home is a big deal. It's one of the largest investments you will make and you want to make sure you are doing everything correctly so your transaction goes as smoothly as possible. We want all of you to accomplish this feat, so we will be sharing with you today the 1st 5 steps to take when you decide to purchase a home. These 5 factors will greatly affect your buying power and what kind of loan you will qualify for when purchasing a home. 

1. Get Pre-Qualified

 This is always the first step when you purchase a new home. Go talk to your lender and get this step squared away first. If you need to get in touch with a lender, we have a list of preferred lenders that we know and trust to put you on the right path.

2. Credit Score

 Before you go in to talk to the lender, be sure your credit score is in order. This is the first thing that lenders will pull. They take 3 scores from the 3 different credit bureaus, and usually take the middle score. Usually a credit score of 620 or higher will get you qualified to purchase a home.

3. Income and Job

 Next, lender will verify that you have solid employment and look at how long you have been employed with your current company. They also look at how much money you make and determine whether it will be you alone or whether a partner or spouse will be on the loan with you. If so, they will take their income and job into effect as well.

4. Debt-to-Income Ratio

 This is a key component in determining your purchasing power. If you have a high income, but high debt, you may not qualify. This ratio is determined by your annual income divided by your expenses.

5. Down Payment

 This is an essential factor. Setting a lot of money aside is a great way to increase your buying power. If, however, you can't put a lot of money down, there are a lot of programs out there for you that don't require you to put as much down, even if you're a second or third time home buyer.

Greater Cleveland Area Real Estate Year End Review 2013

Click here to find out what your home is worth or to search all area homes for sale.

Welcome back! I have some great news! We are now a part of Warren Buffet's company, Berkshire Hathaway Home Services. We are so excited; it's a great brand and we can't wait to take advantage of all the new tools they have to offer.

If you are currently listed with us, the signs in your yard will change. If you have any questions about the company you can give me a call, or you can check out more about the company by clicking here to visit the website or click here to view what Warren Buffet has to say.

I also wanted to recap what happened in 2013 and find out what you can expect from 2014. In 2013 the Michael Kaim Team saw a 10% increase in sales year over year. The Cleveland market as a whole saw a 13.5% increase in sales.

Interest rates were phenomenally low in 2013; at the beginning of the year they were 3.25% and they ended at 4.5%.

So what can you expect from 2014? Inventory is still low, but it is expected to increase as the spring draws nearer. Interest rates are still right around 4.5% but are expected to increase to as much as 5.5%.

If you are thinking about selling, now is the time. There is little inventory which means less competition and the interest rates are still low enough that there are a number of buyers looking.

If you are thinking about buying or selling, or have a question about our new name, give me a call today at 440.974.0404