Information for Buyers: How Much Home Can We Afford
Are you considering buying your first home? It is important to know how much you can afford before you begin your home search.
The first thing you should do is talk with a reputable lender to get pre-approved for a loan, being pre-approved will put you in a stronger position to negotiate with sellers.
Generally speaking, your monthly housing costs should not exceed 28% of your pre-tax monthly income. These costs include the mortgage payment, property taxes, and homeowners insurance.
If you have long term debt, car payments, student loans, and credit cards with out standing balances, and the housing expenses combined should not exceed 36% of your pre-tax monthly income.
F.H.A. and V.A. loans are somewhat more flexible in their qualifying ratios. Your professional real estate agent can recommend reputable lenders you can meet with.
We have learned this information through years of experience. However, we are sure your situation might be different. That's why WE ARE HERE. It is our job to personally advise home buyers and sellers. Ask us if any of the information here applies to your situation.
If you have any questions about the information you have found here or somewhere else, ask us. We will respond quickly without cost or obligation.