Understand Your Home Funding Options
How much can I afford to pay for a house?
This is a question that many people ask themselves when they start looking for a home. The answer will depend on your gross income, debt, monthly expenses, and the size of the house your family needs.
On the other hand, obtaining a mortgage is one of the most critical steps in buying a home. Pre-qualifying for a mortgage loan will allow you to determine how much your monthly installments will be, what down payment you will need to make, and how much time it will take to pay off the loan, depending on the interest rate.
Getting pre-approved for a mortgage may not seem like such a big deal at first glance, but it could save you from making costly mistakes later!
The following are the main factors that will determine the price you can afford to pay for a home.
Another crucial factor that lenders consider is the housing expense-to-income ratio. This is the percentage of your income that is left over after paying the mortgage payment, property taxes, and insurance on your home each month. The higher your ratio is, the less likely it will be that you can afford a new house.