How Much House Can You Afford?
Are you in the market to buy a home? If so, you have undoubtedly wondered how much house you can afford. We encourage you to give this question some thought before you embark on your home shopping adventure.
So how much house can you afford?
Your licensed mortgage lender can assist you with this question. Your lender will assess your gross monthly income compared to your liabilities – usually by reviewing your credit report. Liabilities include anything you pay on a monthly basis – including credit card payments (revolving credit accounts) and loan payments (installment accounts).
After a thorough review of your credit report and all the payments you are currently under obligation to pay – you will want to gather information on all the payments you make on a monthly basis that are not recorded on your credit report. For example, you will want to make a list of the monthly payments to your landscaping service, pool cleaner, or child care provider.
After you have compiled a comprehensive list of all your monthly payments and have calculated your gross monthly income – your debt-to-income ratio can be determined. Your lender will use this information to determine how much you are pre-approved to purchase a home for.
So you have a pre-approval for $200,000. So start shopping, right?
Not just yet. While your debt-to-income ratio is something your lender uses to determine how much they think you can afford – you must also consider how much you are comfortable paying for on a mortgage each month. Consider life and all the changes that may in your future. Perhaps, you would be more comfortable purchasing a home closer to $175,000 to ensure your comfort level? Then again, maybe you’re perfectly comfortable paying on a $200,000 mortgage. Ultimately, this is your decision – an important decision that should be undertaken with great care.
Are you ready to begin the mortgage loan application process? Or would you prefer to contact a licensed Inlanta Mortgage loan consultant to discuss your personal home financing needs and get a pre-approval letter today!
Want to learn more? We strive to be your source for mortgage advice – check out the following posts aimed to educate the first time homebuyer:
Get Pre-Approved for a Mortgage
First Time Home Buyer Advice
First Time Home Buyer Mistakes
First Time Home Buyer Mistakes Part II
Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is fully delegated HUD-FHA including FHA 203K, VA, and USDA approved. Inlanta Mortgage also offers numerous state bond agency programs. Review Inlanta’s mortgage loan programs here.
Inlanta Mortgage is a multi-state mortgage banker based out of Brookfield, Wisconsin. NMLS# 1016. Inlanta Mortgage is proud to be a recent recipient of a 2012 Top Workplace Award.