How much can I afford?
Before you go out looking for a home, you can get an idea of what you can afford by using Mortgage Calculators.
The Benefits of Equity
Equity is the principal part of your monthly payment that you can use as a down payment on a new home, or collateral for a home equity loan. You can use a home equity loan to finance home improvements, a child's college tuition, or a new car.
Real estate is also a great way to keep a hedge against inflation. While some homes do appreciate in value more quickly than others, real estate usually keeps pace with inflation. (Your REALTOR® can provide you with the housing appreciation rates in the areas in which you're interested in buying.)
That Wonderful Thing Called a Tax Break
In contrast to renters, homeowners may receive tax breaks (consult with a tax advisor regarding your specific situation). Interest paid on a home mortgage is typically tax deductible, and property taxes are deductible for homeowners.
Pre-qualification vs. Pre-Approval
Pre-qualification is just a guesstimate of how much you could afford. But with a pre-approval, it's just that: getting your mortgage approved prior to going out and looking for a new home.
EWM's affiliated mortgage company, HomeServices Lending, can quickly help you through the pre-approval process online, or you can contact a mortgage consultant directly for local, in-person service.