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Answers (7)
- Andrew Adams, "203K Specialist"
- Contributions:9349
The only one that can answer that is you. A lender can tell you if they can get you a mortgage. What a lender can get you approved for may not fall into the catagory of what you can reasonably afford.
The approval process does not factor in your lifestyle. Start with what payment would be reasonably comfortable for you to afford and have the loan officer tell you what that transalates into a purchase price.
The approval process does not factor in your lifestyle. Start with what payment would be reasonably comfortable for you to afford and have the loan officer tell you what that transalates into a purchase price.
- Dee Ceylan, "Your Local Expert!"
- Contributions:161
Hi Diane,
To save time, money and headache, please talk to either your bank's mortgage officer or well known or respected mortgage broker of your choice.
When you sit down with them, they will check your credit and your income to be able to determine your comfort range..Depending on your financial situation, they will tell you your down payment options, interest rate, mothly payment etc..They have very attractive local, state and federal programs for every buyer and budget these days. if you combine this with today's low home prices, you have the perfect storm to act..
If you are not ready they will tell you so..and give you recommendations and advise to be ready in the near future..
Good Luck!
Dee Ceylan, Realtor
To save time, money and headache, please talk to either your bank's mortgage officer or well known or respected mortgage broker of your choice.
When you sit down with them, they will check your credit and your income to be able to determine your comfort range..Depending on your financial situation, they will tell you your down payment options, interest rate, mothly payment etc..They have very attractive local, state and federal programs for every buyer and budget these days. if you combine this with today's low home prices, you have the perfect storm to act..
If you are not ready they will tell you so..and give you recommendations and advise to be ready in the near future..
Good Luck!
Dee Ceylan, Realtor
- Poonacha Bollera RE/MAX, "Poonacha Bollera"
- Contributions:107
Talk to your Bank Mortgage Loan Officer. Get a pre approval, This gives you the range in which you can buy.
- Stephen Bornet, "StephenBornet"
- Contributions:8
Speak to any mortgage company or your own bank. They can advise re. the MAXIMUM amounts of money you can borrow. Then, take a look at your monthly outlays and see what you can affort, would be my suggestions.
- Dana Voelzke, "danbury_realtor"
- Contributions:824
Hi Diane,
Ideally you don't want your total mortgage payment to be more than 1/4 to 1/3 of your income. Your TOTAL mortgage payment includes
1) principal and interest on the mortgage loan
2) property taxes
3) insurance and common charges if purchasing a condominium
4) private mortgage insurance, if applicable
This can be hard to do in Fairfield County!
Be sure that when you look at your income, you have already removed any fixed payments such as car payments or other long-term debt payments, etc.
Other questions you shoudl ask yourself are:
1) How much of a down payment are you putting down (this will affect the amount you have to borrow and also whether or not your loan will have private mortgage insurance (or PMI)
2) Do you have enough savings/reserves to cover yourself for a few months after the down payment
3) Can you afford the heating costs of the home you are buying (this can be a big one, especially if moving to a larger home)?
4) Have you factored in maintenance costs of the home such as replacing the roof in 5 years when it goes, buying a lawn mower to cut the grass, etc. You need to set aside some funds in your budget for that.
5) After doing a new budget for the new house, can you still afford to save money and achieve your other financial goals?
An easy way to make sure this will work for you is to pay yourself every month whatever you would pay for the new house. So for example if your current rent is $1,000 and the new house payment is $1,200 plus $300 a month more for heat and maintenance, make sure you pay yourself the extra amount into a savings account. Try it for a few months and see what happens.
- Scott & Marla Wynn, "WynnTeam"
- Contributions:79
Ratios are a good way to get started to get a general idea of what you may afford I would highly recommend talking with a licensed mortgage lender. Mortgage lenders will review your financial situation and provide you with different loan options that may fit your needs. Once a loan program has been selected they can use the tools they have to identify what you can qualify for.
The reason this is important is because most sellers want to make sure they sell their home to a QUALIFIED buyer. They do not want to take their home off the market and miss other opportunities while they are working with an unqualified buyer. To protect themselves, sellers normally require a pre-approval letter from a lender to verify you are able to afford the home you are buying.
The reason this is important is because most sellers want to make sure they sell their home to a QUALIFIED buyer. They do not want to take their home off the market and miss other opportunities while they are working with an unqualified buyer. To protect themselves, sellers normally require a pre-approval letter from a lender to verify you are able to afford the home you are buying.
- James Dunn, "DunnRealtors.com"
- Contributions:373
Here's a link that gives a quick overview of a ratio many lenders use: the 28/36 ratio.
http://www.getsmart.com/loan-resources/Mortgages/Debt-to-Income-Ratio.aspx
It's merely a guideline on what lenders use, and ultimately no matter what lenders say, only you can determine what you are comfortable paying, but it should give you a decent idea of about what you should be able to afford.
Once you've determined what your monthly payment threshold is, you can use an online mortgage calculator to determine the overall purchase price that would fit into your budget.
http://www.getsmart.com/loan-resources/Mortgages/Debt-to-Income-Ratio.aspx
It's merely a guideline on what lenders use, and ultimately no matter what lenders say, only you can determine what you are comfortable paying, but it should give you a decent idea of about what you should be able to afford.
Once you've determined what your monthly payment threshold is, you can use an online mortgage calculator to determine the overall purchase price that would fit into your budget.
I am looking at houses interested in buying. How do I know what I can reasonably afford?
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