Virtually everyone must limit their home design, size, style and home design aesthetics according to their budget. This is also true of our clients at the upper end of the home market. Your house design will determine whether it costs $80 per square foot, or $200 per.
To determine what you can afford to spend on a house design is very easy. Simply call your local bank's mortgage department. By asking you a few financial and family questions, they can calculate, using current interest rates and your current income, how much principal you should be able to borrow for your new house design. This assumes you have given complete and honest answers to their questions. This should take less than 5 minutes, although there will be no guarantee or commitment, it will generally be very accurate but keep in mind that interest rates can change tomorrow, and so can your income. Be sure your taxes and home insurance have been calculated in the equation. As a rule of thumb, 28% of your gross income before deductions can be spent on house payments, including real estate taxes, home insurance and association fees, if any. (35% maximum for all payments including car and credit card payments.)
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