How Much Home Can I Afford?
While a new home is probably the most expensive purchase you’ll ever make, most families realize that when they take the time to break down the numbers, that not only can they afford to buy a new home, but that they can do it within their current family budget. A good rule of thumb is that you can often afford about 3.5 times your gross annual income, as long as your current monthly expenses are average. A simple visit to our “affordability calculator” will let you how much home you might qualify for. All you need to know is your monthly income, expenses and available down payment. Of course, mortgage qualification depends on a number of individual factors, from local property tax rates to credit scores. To get a more detailed, accurate prequalification, please fill out our “prequalification form” or just give us a call, and any of our agents will prequalify you by phone.
The amount of home you can afford is based on the amount of mortgage loan you can comfortably support. Generally, the amount of mortgage you qualify for is based on three factors: • Your monthly payments as a percentage of income. • How much cash you have for the down payment and closing costs. • Your credit history. Our calculators can help you determine the monthly payments for a home loan.
Generally, lenders want your monthly payment, including taxes and insurance, to be 28% of your gross monthly income. Your loan officer can help you determine what price home to shop for by reviewing your income, debts and credit. You can also apply for a pre-approval where the lender approves the loan for 90 days before you find a new home. Pre-approval makes your offer more attractive to a seller.
Generally, lenders want your monthly payment, including taxes and insurance, to be 30-35% of your gross monthly income. We can help you determine what price to shop for by reviewing your income, debts and credit. But it’s a good idea to start with this helpful mortgage qualifier calculator. You can also apply for a pre-approval—that is, we’ll approve you for a certain loan amount before you start shopping. Also, a pre-approval can make your purchase offer more attractive to a seller.
