It would be best without know credit info that you just get pre-approval or pre-qualified by a lender. This way you know for sure what you can afford and, when you submit your offer to buy they will want a pre-approval letter anyway. This will be the first big step.
Coldwell Banker Triad
Buying a home is both a financial investment and an emotional investment. In order to make a good buy, the property should satisfy both needs. However, if you must err, it is far better to come down on the side of the financial. If this is your first purchase, you should remember that most people buy as if they will spend their lives in a property; but the truth is that you will own it 3 to 5 years if you follow the average. If you look at what is going on in the housing market today--you see the effects of bad decisions made by many. In your search you will of course look for the property that offers you the most for the least amount of money. Keep in mind what you must spend on repairs, upgrades and renovations in addition to the initial price you pay. If you are quoted "comps"; be sure the properties are close to yours in size, age and condition as well as location.
Yes, based on your income only, you should be able to afford a loan of about $330K, if it is a 30 yr loan at 6% fixed interest (today's rate in our area). That would make your total house payment (PITI) approx. $1984 per month, which is 28% of your before tax income. Add your downpayment amount to this loan amount, and you have the sales price for a house you can afford.
BUT, as I said in my previous response, your OTHER long term monthly payments (anything with more than 10 monthly paments left on it) will come into play as well. If the total of all those other monthly payments is $570 month or less, you are good to go at this loan amount. There can be some flexibilty on both house payment and total monthly payments being somewhat higher, but your long term monthly payments can definitley affect the loan amount you qualify for, and that will affect the price of the home you can afford. I see it happen all the time!
Making $85K/yr., at age 24, I am guessing you have a pretty nice care (I would, if I were you). If you do, there is a good chance you have car payments of close to $500 (or more) per month. If that is the case, that doesn't leave you much wiggle room, with only $70 (or less) per month for all your other longer term monthly payments. If you have credit card debt, student loans, etc. $70 isn't much to cover them, so you really need to talk to a lender, and have your individual circumstances evaluated, to get anywhere close to an accurate idea of a house you can afford. Do it soon, and take advantage of the good prices that are out there now. I hope you find a great home, at a great price, and become a home owner in the very near future - you won't regret it.
To Hi - have you talked to a Realtor lately in your area of Virginia to find out the buying trends in the last 2 months? If you haven't, you should. Real estate is always localized ,and forming opinions on the market from generic information about the real estate market overall, can put you in a position of missing out on the best timing to get the best price. If your market is like ours, Buyer activity is way up!! This is due to really good home prices now, interest rates that continue to stay low, and a combination of other factors. Many houses are being bought NOW! This activity will begin to decrease inventory supply, especially in the most popular price ranges in your area, and since supply effects demand, and demand effects price - that could mean price increases in the near future. You need to talk to someone who is a real estate professional to see what is really going on with prices, and find out if you are as on top of the housing market as you think you are.
Sure prices may or may not come down however, I cannot believe interest rates will and in the long term it is the interest on your mortgage that will sap you monthly costs and not the price of the home.
Listen to the already answered (except say bye to Hi) and find what you can afford.
If you are worried about depreciation in the short term, then do not sell in the short term.
Wait until the market changes (and it will, because it always does) and then sell.
As agents that also helps us because agents don't want to push you into something more than you can't afford either. Or at least I would not do that to you. I want you to be happy with your selection and feel comfortable with your house payment:) It also helps us to know what to look for in houses as well. For example if you are getting an FHA loan, then we don't want to get your hopes up in a house that will not meet the guidelines of the loan. So this is really why you should talk to some mortgage professionals first.
I also think it is in your best interest to find a yourself a buyers agent. Someone who will be thinking of your best interest in the transaction. They will guide you along the way. Their commission will be paid through the seller as it is part of the listing contract for a seller when they list the property.
It is not a bad idea to read over an "Agency Disclosure". This will descibe all of the ways an agent can work for you and you can decide what is best for you. If you need a copy of this please feel free to go through my website at http://www.GoMelinda.com and request a copy of it.
I hope this information helps! Best Wishes! Buying a home is such an exciting time!!!!