How Much Home Can I Afford?
In most instances, you can afford a home that costs up to two and one-half times your annual gross income, the amount you make before taxes are deducted. Lenders will also factor in how much cash you have available for a down payment and closing costs, plus your existing monthly debt payments, living expenses and credit history.
Generally, lenders want your monthly payment, including taxes and insurance, to be 25-30% of your gross monthly income. Your loan officer can help you determine what price of a home to shop for by reviewing your income, debts and credit. Contact a loan officer at (800) 897-7499 or visit any Peoples State Bank branch location.
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.
Generally, lenders want your monthly payment, including taxes and insurance, to be 30-35% 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 before you find a new home. Pre-approval makes your offer more attractive to a seller.
