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HOW MUCH CAN YOU AFFORD?
Many factors come into play when deciding how much house you can afford. This is a very personal decision. How much will I be able to borrow? How much should I put as a down payment? How much will I be able to afford as a monthly payment?
There are no written rules to answer these questions. It’s a matter of personal choice and lifestyle. Normally with a 30-year mortgage, you can make a lower down payment (or even no down payment at all) and still have manageable monthly payments. On the other hand, if you choose a 15 year mortgage, you’ll need to make a larger down payment to keep your monthly payments low.
How large a down payment can I make?
Many buyers think that their only source for their down payment is their cash on hand. This is not true. Another way to build up your funds for a down payment is by using a gift. Family members such as parents and grandparents are often happy to help with the down payment and will make a cash gift toward the purchase of your home.
There are also charities that offer down payment assistance charities that can help you. In addition, of course, if you already own a home, any equity you’ve built up can be applied to your down payment.
We will help you explore all your down payment options, including low down payment and 100% mortgage financing options and find the right down payment option for you.
What size monthly payment can I afford?
To determine how much you can afford to pay monthly, you’ll need to take into consideration your other monthly expenses. Tangible expenses such as car payments, car insurance, day care and utility bills will all be a factor in determining how large a monthly payment you can afford.
Then there is the intangible expenses or lifestyle expenses that you’ll need to consider. Things such as dining out, entertainment, vacations and when you buy your next car will effect how much you can afford. Are you willing to give up some of these expenses or delay some of these expenses in order to afford a larger monthly payment?
How much can I borrow?
It is best to answer this question before you begin your home search. We are here to help you answer this question. Our mortgage calculators will help you see how your down payment, monthly payment and the amount you borrow are all interrelated.
We will answer any questions you have about the mortgage process. However, the best way we can help is by getting you pre-qualified for a mortgage loan. To get started, simply complete the information form and let us know when is a good time to contact you. We look forward to helping you buy your dream home.