How much can you afford?

Deciding how much house you can afford is a personal decision.Many factors come into play.How much can I borrow?  How much can I put toward my down payment?  What size monthly payment can I afford? 

If you are a first time home buyer, the "normal"  ratio's with a minimum down payment are 31/42.  That is 31% of you gross monthly income can be spent on your total house payment, including principle, interest, taxes, insurance and home owners association dues (if any).  The 42% is what the total percentage of gross income goes towards housing AND monthly credit obligations such as car payments, credit card payments student loans... If you have reasonable credit (scores over 620) there is a good chance that staying within these ratio's will result in loan approval with as little as 3.5% down.

How large a down payment can I make?

Many buyers look at their cash on hand as their only source for their down payment.  This simply is not the case.  Some alternatives to increasing your down payment include gifts from family members, down payment assistance from government agencies and secondary financing.  If you are a first time home buyer you may also access your retirement funds without penalty. 

What size monthly payment can I afford?

When determining what size monthly payment you can afford, you'll want to consider what other monthly expenses you have.   Tangible expenses such as car payments, day care and utility bills, all play a role in how large a monthly payment you can afford. 

There are also the intangible expenses or lifestyle expenses that you'll want to consider.  Things such as dining out, travel and when you buy your next car can effect how much you can afford.  Are you willing to curtail or delay some of these expenses in order to afford a larger monthly payment? 

How much can I borrow?

This is a question you'll want to get answered before you begin your home search.   This is something that were here to help you with.  Our mortgage calculators will help you see how your down payment, monthly payment and the amount you borrow are all interrelated. 

We can answer any questions you may have about the mortgage process.  But the best way we can help is by getting you pre-qualified for a mortgage loan.  To get started, simply complete the form below to let us know a good time to contact you.  We look forward to helping you buy your dream home.