If you’re on track to buy a house in the near future, you’re probably wondering how much you can afford. Here’s what you should know.
If you’ve been thinking about mortgage loans, you might be wondering how much home can you afford? That’s a critical question if you want to buy a home in the not so distant future. You want to invest wisely, get what you need, but not overextend yourself. Nothing takes the shine off a new home like finding yourself house poor. Here’s how to know how much home you can afford.
The first thing to look at is your budget. This should include your monthly household income from all sources, including your paycheck, any alimony you might get, investments, or other earnings. This is going to let you know how much money you have coming in.
Next, take a look at all of your monthly expenses. You should include food, gas, car payment or transportation, insurance, health and wellness, beauty and personal care, and entertainment. Make a list and put everything on it that you spend money on every month. This helps you see how much goes out of your bank account monthly.
Your mortgage payment should not be more than 28% of your income. When you set your house-hunting budget, keep that in mind and don’t look for anything that will cost you more than that on your monthly mortgage payments. You can use this user-friendly mortgage payment calculator to run the numbers.
It can be hard to know just how much home you can afford based on your income and your expenses. Our experienced team of mortgage professionals can help walk you through the process of figuring out how much you can comfortably spend, and we can let you know how much you qualify for. Contact us today, and we can help match your mortgage needs to the right product so you can get into your new home without stretching your budget.