How Much Home Can You Afford?

How Much Home Can You Afford?

Everyone can afford a different amount for a home and it’s best to know how much you can afford.

Before you hit the home market and start shopping for homes way above your price range, it is important to know how much home you can afford. It is the biggest question you will have when you begin shopping for a new home. If you are looking to buy a new home, these steps can help you determine how much home you can afford.

How to Find Out How Much Home You Can Afford

  1. Calculate Mortgage Payment
    It is more likely than not you will need to take out a mortgage to purchase a home–very few buyers pay with only cash. If you will be taking out a mortgage, you can use an online calculator to get a rough estimate on how much you can afford.
  2. Consider Your Debt
    Note all the debt you owe including car loans, student loans, credit card, and other debt to know your debt to income ratio. This amount should be no more than 36 percent of your gross income.
  1. Factor in General Expenses
    To get the best idea on how much you can spend, consider tallying up your monthly amount. Include your utilities, food, gas or commute, “fun,” and anything else on which you spend on a monthly basis. The amount you spend on these items will leave you with less income to put toward your monthly mortgage payments.
  1. Visit a Mortgage Lender
    Get pre-qualified and pre-approved for a mortgage loan, and, if at all possible, get your estimate from several lenders. The lenders will tell you how big your mortgage may be. When you start your home shopping process, it is important to get pre-approved in order to look good to buyers.

To properly purchase a home, contact a dedicated home loan specialist like me, Andraya Coulter. I serve the Bay Area and the entire state of California and Texas with quality, suitable, home loans! I can help guide you through the refinance process and make sure you get the home loan you deserve. Call me!

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