Fitzgerald Realty & Auctioneers
William J. Fitzgerald
How Much House Can You Afford?
5 Easy first steps to find out what price house you can afford
Finding what price house you can afford to buy can be a time-consuming process of calling on several lenders, collecting data on various current mortgage rates and reviewing your finances with several lending officers. Fortunately, there’s an easy way around all this. With a few simple steps, you can figure out for yourself the approximate mortgage amount a lender is apt to approve for you. That amount, plus the amount off your downpayment, gives you the price range of homes you are qualified to buy. In real estate we call this exercise “pre-qualification.” First, you need to find what interest rate is currently being charged for 30-year fixed rate loans. But, instead of phoning several lenders, you can simply give me a call. I make it my business to have the latest information on lenders’ rates and financing packages right at hand. Next, apply the following do-it-yourself system to zero in on the approximate mortgage amount lenders are likely to approve:
1.      Calculate your gross monthly income-the amount you make before deductions. Add your spouse’s gross monthly income, if any.

2.      Deduct from the total any monthly payments you make on long-term debts (more than 10 months), such as an auto loan or regular payments on furniture, appliances, school, alimony or child support.

3.      Multiply the resulting figure by 30% (.36) to get your “income-to-debt ratio.” The answer will conform with generally accepted lenders standards of what borrowers can afford, after a downpayment of 10%. Some lenders and mortgage plans apply more or less strict factors; say 33% of 38%, especially when your downpayment is 5% or 20% respectively. Also many lenders will calculate a second “PITI ratio” figure, using 28% times gross monthly income without subtracting debts, to establish your qualified monthly payment range. Again, the percent factor without subtracting debts may vary; say 25% or 33%, under certain circumstances.

4.      Take a “guesstimate” of average annual real estate taxes in your area, plus the annual cost of homeowner’s insurance. Divide by 12 to obtain a monthly figure. (On average, the monthly cost of these two items might be about one-tenth of 1% of the house purchase price. Ask me about your specific situation.)

5.      Deduct the monthly taxes and insurance cost from both figures you arrived at in step 3. The result is the ballpark monthly payment on principal and interest you can afford to pay on a mortgage. With the amount of principal and interest (PI) payment you can make in hand, I calculate the amount of mortgage you can obtain, at various rates. Or you can find the approximate answer for yourself. I’d be happy to discuss the many alternative mortgage plans-besides the 30-year fixed rate-that can dramatically increase the home price you can afford.
Remember, the price range of homes you can afford is figured after a downpayment is added to your qualified loan amount. In addition, you’ll need to set aside an amount for closing costs and point payments. Ask me how much these may amount to in your specific situation.  

What is P.I.T.I.?

Principle, Interest, Taxes, Insurance. These are the four elements that make up the usual monthly mortgage payment. These costs are often called “carrying charges” Although lenders qualify buyers also allocate income to meet maintenance, utility costs and any homeowner’s or condominium fees in addition.

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What our clients are saying  

We had great service, we would recommend to family & friends, would work with again, very helpful and went the extra mile to help, very friendly, professional and answered all our questions, returned our calls, emails and text messages very quickly, very reliable and efficient, extremely helpful & informative, very knowledgeable.


~ Randy and Jill Stauffer/St. Mary's Seller

Billy was the best, helped me with everything and got it done. I'm very happy and satisfied.


~ Joe Young / St. Mary's Buyer

Very good experience with Fitzgerald Realty & Auctioneers.


~ Rick Greer/St. Marys Buyer

Billy got the job done!


~ Wally Yowaiski/St. Mary's Seller

Fitzgerald Realty helped us find the home we wanted to invest in and guided us through the process of buying it. Settlement was conveniently done in their office and went very smoothly. We are planning to purchase again through this company. Thanks Billy


~ Tom & Betty Campbell/St Mary's Buyer

I reached out to Fitzgerald to find a rental for myself and two kids. I spoke first to Office MGT. , she was very helpful. She then put me in good hand with Mark Thompson. He was helpful, showed me property, answered all my questions, punctual and any time was a good time for him. He definitely was there to help! Thank you so much and when I'm ready to do the whole buying of a house goal I will definitely be calling up Fitzgerald Realty :)


~ Leighann Myers / St. Marys Renter

Billy Fitzgerald was very diligent in keeping us informed on the status of the sale and the settlement for the property that we had for sale. He currently has one other listing for us and feel confident that he will be successful in finding a buyer for this property as well. We will certainly recommend Fitzgerald Realty to our family and friends.


~ Linda Tyler / St. Marys Seller

I want to thank you for getting my Townhouse sold. The way you took the photos, listed it and being "straight" with me on the asking price made all the difference. I also want to thank you for the excellent service I received while in your capable hands. You are a TRUE SOUTHERN MARYLAND GENTLEMAN and an OUTSTANDING Real Estate Agent. Again, Thank you Billy ....


~ Carolyn "Judy" Bakewell / St. Marys Seller

We had great service! We would recommend Billy to family & friends. He was very helpful and went the extra mile to help and would work with again. He was very professional, friendly and answered all our questions. He would return our calls, emails & text messages very quickly. He was extremely helpful, reliable & efficient, also very informative & knowledgeable. I give him 5 stars!


~ John Taylor / St. Marys Seller

Good professional, courtesies service. The agent went to bat for me on every opportunity. After the deal was struck Billy aka (COL) did all that was expected and moved rapidly to wrap to entire transaction up. My family appreciated working with Billy and the Fitzgerald Real Estate family and we would recommend their services to others.


~ Mark Steedley / St. Marys Buyer

Billy went far beyond what anyone else before him did. Billy is a great person and will be the only one I ever recommend!


~ Craig Tiburzi / St. Marys Buyer

Amazingly when I saw a Fitzgerald Sign in the front of property I had to have, I reached out to Mr. Billy Fitzgerald and in less than a month the necessary people were contacted to assist in a short wait to closing. I would gladly recommend The Fitzgerald Realty & Auctioneers to family and friends.


~ Brian Small / St. Marys Buyer

My husband and I were very satisfied with the expertise and helpfulness of Mr. Fitzgerald. 4 stars


~ Carol Pingleton / St. Marys Seller

I wanted to commend Fitzgerald Realty & Auctioneers for the great job that they have done, for the many years of selling Real Estate for me and my clients. I have always found you very responsive. “A successful transaction is never an accident it is the result of personal service and a sincere effort”. Keep up the good work. Sincerely, Rudolf A. Carrico Jr. Attorney at Law


~ Rudolf A. Carrico, Jr. / Charles County Seller

Awesome ! We are so happy with Billy & Fitzgerald Realty !


~ Misty Peed / St. Marys Buyer

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