This is a great time to enter the property market – the best time in recent memory, in fact. Here in Elmhurst interest rates remain at all-time lows, and home prices are still very attractive. But given the hard housing lessons learned nationwide of late, how do you know how much house is right for you?

Lenders have a very specific formula they use to determine how much to lend to you. Even if a lender approves your application for X amount, that doesn’t mean you should actually spend that much on a home. Consider the following to find the right balance for you and your bottom line.

Know your monthly income. If you’re a salaried employee, this is simple. If you work on a commission or tip basis, consider both high and low income months, and find a realistic point in between to call an average. Also, consider the stability of your income. Today’s job market is less predictable than in the past, so bear this in mind as you calculate your predictable income.

Know your debt load. Car loans, credit card payments, child-care costs, and other debts must all be factored in to your monthly budget.

Know your monthly expenses. These costs are in addition to your debts, and include such things as grocery bills, mobile phone bills, commuting costs, Internet fees, and so forth.

Know how much you can reasonably put toward a down payment. Most lenders today expect buyers to put down at least 20% of the purchase price plus pay for closing costs. Bear in mind that you should also keep an emergency fund for unexpected expenses, and don’t assume that all of your savings can safely go toward a new home purchase.

Know how long you can plan to stay in your new home. Real estate today just doesn’t appreciate at the same rate it has in the past, so you’ll need to plan to stay put for at least 5 years before breaking even.

Now is an excellent time to consider a property purchase, and Elmhurst is an excellent place to call home. The Gracik Makinney Real Estate Group is here to help you make the most of these opportunities. With community knowledge, industry experience, and personal dedication, our team is the best place to start on the road to home-ownership. Contact us today at 540 South York St. in Elmhurst, or at (630) 567-5902.