How Much Home Can You Afford?

Posted by Craig Donofrio

Nov 24, 2014 10:59:34 AM


Looking at sprawling villas in the suburbs and 2,000-square-foot condos in the middle of downtown is one thing. How much home you can afford may be entirely different.

Of course, there’s nothing wrong with looking. But when it comes down to finding a place that fits perfectly in looks, size and price, you need to know your affordability factor.

What Is Your Family Plan?

It’s not just how much you make; it’s also what you plan to do with it.

Do your best to anticipate what the next five years or so will be like for you and your family. Are you planning to have kids in the next few years? Is your teen graduating from high school? Will they need you to co-sign for a college loan? Are you planning for a wedding? All these can raise your debt-to-income ratio.

Even if you can afford a mortgage with a 40% debt-to-income ratio now, life events like having children can bring that ratio up to and over 50%.

Do your best to map out what the next five years or so will look like and keep an emergency fund for the unexpected. Plan for the house you can afford today—not what you can afford a few years from now when the raise kicks in.

What Is Your Payment Approach?

Do you want to plan conservatively, moderately or aggressively? The difference can determine the type of home within your ballpark range.

For example, if you make $73,000 a year, have a $40,000 down payment, $350 in monthly debts and want to buy a house in Ridgefield, CT, these are the scenarios to consider:

The conservative approach: no more than 28% of your income goes to housing expenses and 36% goes to debts. House affordability range: $303,000

The moderate approach: no more than 33% of your income goes to housing expenses and 38% goes to debts. House affordability range: $349,000

The aggressive approach: no more than 36% of your income goes to housing expenses and 41% goes to debts. House affordability range: $362,000

The more aggressive the approach, the more budgeting discipline you need.

You also will need better credit, as you will be taking on more debt for a more expensive home.

Figure out which works best for you—remember, it’s better to err on the safe side rather than be strapped for cash each month.

Check out the® affordability calculator to see what spending approach looks like for you in the area of your choice.

What Is Your Preferred Location?

You might not have the means to afford a house in a central location. If that’s the case, consider a ZIP code in a neighboring area.

To get a feel for houses in your price range, use our affordability calculator for a nearby area and then check the listings at the bottom of the page. If you can’t find something you like, you can always go down in price or continue to rent until you have the means to afford that dream home.

What Are Other Homeownership Costs?

Home ownership isn’t as simple as paying the mortgage. You can be sure other expenses will pop up.

For example, if you can’t make at least a 20% down payment, you will need private mortgage insurance. If you have an FHA loan, you will have to budget for premiums.

There’s also property tax and home insurance on top of closing costs. Repairs, general maintenance, condo fees, utilities and buying new furniture for your new home also need to be anticipated.

The more thorough your budgeting, the more comfortable you’ll be when shopping for a home.

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Topics: National Real estate trends, Homes Sold, VT Real estate trends

Four Things To Do If Your Property Doesn't Sell

Posted by Jayne Thompson

May 19, 2014 3:18:34 PM

House-For-SaleAll the signs suggest that we're in a seller's market. By rights, there should be more would-be buyers than houses for sale. Basic rules of supply and demand draw us to the conclusion that, in this market, your home should be selling in a matter of weeks, if not days. Yet here it is, dwindling on the market. Why are buyers not biting and -- more importantly -- how can you turn it around?

These four tips should get your home out of its rut. 



1.         Refresh Your Advertising

Today's buyers have access to thousands of listings on the internet, and many look at properties well in advance of purchase. Some research the market for years. If your listing and photographs remain unchanged for months on end, your pool of  would-be buyers will notice -- and disregard you as a result.


To shake up your advertising, begin by refreshing your photographs. Pictures spark interest, so it pays to get them right. Ask a friend to give you an honest opinion about the quality of your shots. Are they too dark or out of focus; do they show dirty dishcloths on the countertop? If your shots aren't accentuating the positive, have them redone. It's a small investment for potentially huge rewards.  


Next, review the language of your promotional material. Work with your agent, if you have one, to come up with new and creative ways to sell your home.  Aim your pitch directly at your target market. For example, if you're selling a family home, wax lyrical about the play room, child-friendly yard and great school district.  Take a look at your competition, vary your tactics and when the buyers schedule an inspection, press home your advantage.


2.         Lower Your Price


Location is one thing, but the two most important factors in selling a property are presentation and price.


  No matter what the market is doing, price is a sensitive metric. Financially, buyers put a cap on what they can afford. Psychologically, few buyers look at properties that exceed their financial cap, even if there's scope for a price negotiation, for fear of falling in love with a home that's simply beyond their means.    

  For sellers, this offers certain marketing advantages. Buyers tend to categorize properties in price bands, for example, $200,000 to $225,000.  A downward price shift of just one to five thousand dollars can be enough to spark interest among a whole new price-category of buyers, who feel a purchase is possible.

 3.         Give Your Property A Face Lift

When a property's not selling, it's time to find out what buyers really think. Solicit feedback. Ask everyone who passes through your doors for their honest opinion -- the good, the bad and the ugly.


You may find that the changes you need to make are relatively small -- a lick of paint perhaps, or a new bath tub. If the feedback's negative without being specific, invest in home staging.  The keen eye of a professional stager can capitalize on your chances of sale for comparatively little cost.


4. Take A Break From the Market


This sounds counterintuitive, but three things tend to happen when you keep your property on the market for a long time without generating a buzz. First, buyers will avoid it. A classic example of group think, buyers typically discount homes that linger on the market because they assume that other buyers have seen them and discounted them for some reason. Second, clever buyers will leverage your misery as a negotiating tool, and hit you with a low ball offer. Third, buyers will pass you over completely, because they've seen your listing so often it becomes part of the background.


If you can, take your property off the market for a few months. Use the time to refresh your decor, your price point and your marketing campaign and, by the time you're ready to re-list, a whole new batch of buyers will be waiting for you.


Above all, remember to stay positive. Everything sells in the end.



"The Edge" Auto Luxury Home Search

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Topics: Homes Sold, VT Real estate trends

HGTV Dream House Sold!

Posted by nelrealty

Jun 26, 2013 12:21:42 PM

exterior exterior

Stowe’s “Dream House” has found new owners! The 2011 HGTV Dream House at Spruce Peak in Vermont’s Stowe Mountain Resort was sold with the help of New England Landmark Realty (NELR) super agent Susi Benoit in April of this year. The original winners of the home in 2011, Eric and Catherine Makstenieks, sold the house for 2.7 million to an active family of seven. The Boston family purchased this second home in hopes of making new and lasting memories. They have five children between the ages of 10 months and 9 years and they all ski except the youngest, making this mountain location a perfect fit. They already have some modifications in mind, the most prominent being the addition of a fourth bedroom over the garage to fit their family needs. In addition to the mountain location, they love the existing open floor plan, which will allow for plenty of family interaction, bonding, comfort, and growth.

New England Landmark Realty’s Susi Benoit will tell you that the house practically sold itself, being a home that anyone would dream to own. As Fox News said, “From the jaw dropping custom designed home to the out of this world views, it truly is a dream home” Stowe's HGTV Dream House. The Dream House architect, Paul Rousselle, said that the main floor of the house has, “this feeling of being in the tree limbs”. This magical tree-house hideaway has two master bedrooms and a bunk room that sleeps eight,  a gourmet kitchen and wonderfully creative living spaces (, making it the perfect gathering place with easy access to all that Stowe Mountain Resort has to offer. The recent buyers will certainly have plenty of opportunities to experience the mountain and create many memories in and around their new home and are excited to become a part of the Stowe community.

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New England Landmark Realty was thrilled to be the real estate company chosen for the sale of the “Dream Home”, selected by the sellers and amidst such fierce competition in the Stowe real estate market. The sellers and buyers appreciated the intimate home buying experience that Benoit of NELR was able to provide them, driven by the company’s mission to provide uncompromising honesty and unparalleled integrity while realizing client’s goals and dreams.

Images courtesy of:

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Topics: Homes Sold