Deciding how much house you can afford is a personal decision. Many factors come into play. How much can I borrow? How much can I put toward my down payment? What size monthly payment can I afford?
There are no black and white answers to these questions. Its a matter of give and take. If you plan on a 30 year mortgage, you can probably make a lower down payment (or perhaps no down payment at all) and still manage the monthly payments. If, on the other hand, you plan on a 15 year mortgage, you’ll probably want to make a larger down payment to keep your monthly payments in line with what you can afford.
Many buyers look at their cash on hand as their only source for their down payment. This simply is not the case. One way to fund or partially fund a down payment is by using a gift. Parents, grandparents and other family members are often eager to help by making a cash gift toward the purchase of your home. And, of course, if you are selling a home, the equity you’ve built up can be applied to your down payment.
But these are not your only options. We can help you explore all your down payment options, including low down payment and 100% mortgage financing options that might be right for you.
When determining what size monthly payment you can afford, you’ll want to consider what other monthly expenses you have. Tangible expenses such as car payments, day care and utility bills, all play a role in how large a monthly payment you can afford.
There are also the intangible expenses or lifestyle expenses that you’ll want to consider. Things such as dining out, travel and when you buy your next car can effect how much you can afford. Are you willing to curtail or delay some of these expenses in order to afford a larger monthly payment? Sure, we can tell you where WE would max you out at, but that doesn’t mean you can comfortably afford it.
This is a question we can help you with before you begin your home search. Our mortgage calculators will help you see how your down payment, monthly payment and the amount you borrow are all interrelated.
We can answer any questions you may have about the mortgage process. But the best way we can help is by getting you pre-qualified for a mortgage loan. To get started, simply give me a call at 269-488-9494 or click here to fill out the loan application. We look forward to helping you buy your dream home.
Many home buyers have been facing a very challenging market over the past few years. The current supply of homes on the market just can’t keep up with the huge demand out there. It’s not uncommon for a home to come on the market and be sold in a matter of days after receiving multiple offers. With this fierce competition, prices have increased substantially over the last few years and has made it challenging for home buyers to find a home within the budget/payment they had planned for. Many go over budget to get the home they want only to have another blow to that budget the following year due to the property tax increase. This increase on the property tax portion of the mortgage payment can really hurt home owners enough to create a financial strain.Visit Jeremy's Blog