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How Much House Can You Really Afford ?

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the staff of the Ridgewood blog

Ridgewood NJ, according to Realtor.com the inventory of homes actively for sale in June decreased by 43.1% over the past year, a lower rate of decline compared to the 50.9% drop in May. A deceleration in the decline of inventory means the market is heading in an encouraging direction, but active inventory still remains at a historically low level. This decline meant there were 415,000 fewer homes actively for sale on a typical day in June compared to the previous year. Nationwide the total number of unsold homes that  includes active listings and listings in various stages of the selling process that are not yet sold– is down 20.3% percent from June 2020.

Amazingly, the inventory of homes actively for sale in the 50 largest U.S. metros overall decreased by a whopping 40.5% over last year in June, a slight slowdown in the rate of decline compared to last month’s 49.4% decrease. Regionally, newly listed homes in large metros in the  Northeast, were growing by only 9.9% year-over-year.

In Ridgewood according to Redfin the average homes sell for about 3% above list price and go pending in around 62 days and “Hot” homes can sell for about 7% above list price and go pending in around 49 days. The average sale price is $933K, up 23.5% since last year and the price per square foot is $392, up 11.0% since last year , with an average down payment of 23.1%.

Some good news for borrowers is that the Federal Housing Finance Agency said on Friday that Fannie Mae and Freddie Mac are dropping a fee on mortgage refinances that was instituted during the pandemic, lowering costs for borrowers.

The  50 basis-point fee was added by Fannie and Freddie was designed to cover losses projected as a result of the pandemic. 

This tight real estate market has driven up prices putting pressure on affordability making mortgage calculations all the more important for home buyers. The question on every home buys  lips is how much home can I afford ? Many websites offer tools to calculate mortgage payments but they are often linked to a particular lending institution .

The search for affordability led to a site called Mortgage Calculators it featured a lot of easy to use tools covering everything from mortgage payments, minimum income requirements , rent vs buy calculations , fixed vs adjustable rates and so on.

The site is easy to use sparing you of too much finance jargon sticking to plain English. One of our favorite features is the Compare Mortgage Terms calculator allowing users to quickly compare five different mortgage scenarios . This calculator allows  comparing  monthly payments and total interest costs for 10, 15, 20, 25 and 30 year mortgages, or comparing the payments on different homes or payments on the same home with different down payment amounts. By default this calculator allows you to calculate the impacts of insurance, real estate taxes & HOA fees. This makes it incredibly easy for home buyers to run “what if” scenarios, even offering an easy to follow printed version. 

The calculators are  surrounded by articles offering  easy to read home buyer advice and listing of local mortgage rates posted by advertisers . The site is easy to use ,easy to follow and packed full of home buyer advice. 

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