How much mortgage can you really afford?

Here are some tips to help you determine a realistic budget for your house hunt!

Different lenders will qualify you for different amounts. Going with the biggest mortgage option is not always the best option. There are some things you should consider before jumping into a large financial decision such as a house mortgage.

  1. Think ahead. This is of course easier said than done, but think about any life events that may be coming up in the next few years. Do you want to go back to school? Will your child be starting a new school that could cost more than their current school? Major life events and changes affect your budget.
  2. The general rule of thumb that people use to get a number on what they can spend is a home priced two to three times your gross income. If you earn $100,000, you can typically afford a home between $200,000 and $300,000. This is not always the case though as everyone has different expenses that need to be considered.
  3. Down payment. This is key.The lower your down payment, the higher your loan and
  4. Check out different online calculators. there are tons of websites that will help you calculate what your mortgage payments should be. For example CNN Money has their own calculator accessible here for you: http://money.cnn.com/tools/houseafford/houseafford.html
  5. Consider your debt. Your overall monthly payments for your mortgage plus all your other bills, like car loans, student loans, utilities, and credit cards, shouldn’t exceed 41% of your gross annual income. Exceeding 41% is how homeowners can get in over their heads.

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Image Source: http://www.buytolet.com

Buying a home is one of the biggest financial decisions you will make, so take time to consider your options! The team at GreatFloridaHomes is always ready to help you with any questions you may have and get you comfortable and ready to buy the right home for you!

 

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