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Articles  >>  How Much Home Can You Afford?

How much home can you afford?

Finding the home of your dreams is an exciting time. However, financing your dream home may be harder than it seems. There’s nothing worse than finding the home you want to buy, and then realizing you can’t afford it. That’s why it’s a great idea to get pre-approved with a mortgage lender before you start to seriously look.

Lenders will use the following factors to determine if and what you will qualify for:

·         Credit History

·         Gross Monthly Income

·         The amount of cash you will have for a down payment, the average is about 10-20% of the sales price of the home.

Most people will have a general idea of what they can afford when buying a home. However, your lender may have a different amount than what you have in mind. Getting pre-approved early saves you time, money, and potential trouble. Once you’re pre-approved, you won’t have to guess on the homes you think you can afford. You’ll be able to find the right home, in a quicker time frame.

When lenders determine the amount you qualify for, they will consider the sales price and down payment. More importantly, they factor in your monthly expenses and how well you’ll be able to handle mortgage payments. The lenders will calculate what you will qualify for, by figuring out a monthly payment you can afford. There are a couple of ways lenders will determine this amount. Usually, your monthly payments should be below 32% of your gross monthly income. Or, all of your long term debt, such as credit cards, car loans etc, should be less than 40% of your gross monthly income. Although it varies from lender to lender, the monthly payment will typically estimate mortgage principle and interest amount, property taxes, and hazard insurance.

CLICK HERE to get help with the preapproval process. You can also estimate what your lender may be willing to lend by using our mortgage calculator.

If you’re thinking of buying, it’s a great idea to get pre-approved early. You’ll have more buying strength since you will know what you can afford. You can look at the homes you can afford and when you find the right one, you’ll be in a position to make an offer quickly before it’s gone. 

 

 

If you have any questions regarding Real Estate in Southern Utah, or Real Estate in St. George Utah, Ivins Utah, Santa Clara Utah, Hurricane Utah or Washington Utah, please feel free to call us at 435-862-3303 or e-mail us @ HotHomesofSTG@aol.com


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