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How
Much Home You Can Afford
Information
and Advice for Home Buyers
First-time buyers are often unsure
about the financial aspects of buying a home, and you
may have many questions swirling in your head. How much
can I afford? Do I need a large down payment?
Your
home price range will be determined by your income,
credit history, the cash you have for a down payment
and closing costs, and your debt. How much you earn
compared to how much you owe will likely determine how
much the bank allows you to borrow.
The
financial rule of thumb is: your total monthly debt
service, which will include your monthly mortgage, shouldn't
be more than about 36 percent of your gross monthly
income. Most experts say that your monthly housing expense,
including taxes and insurance, should not exceed about
28 percent of your gross monthly income.
Naturally,
every situation is different, and each lender has different
rules about working with buyers. A number of choices
within your control can affect your monthly payment
as well. For example, you might choose an adjustable
rate loan, which has a lower initial payment than a
fixed rate program. Similarly, a larger down payment
may lower your monthly payment.
If
you'd like more information about how much home you
can afford, please call or email. I can help you get
the mortgage information you need.
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