What Can I Afford?
Most people dream of owning their own home one day and work towards achieving that goal. Once you have a stable income and some money in the bank, it is time to start thinking about getting a loan/mortgage to become a homeowner. However, you have to determine what you can afford and what kind of a loan you qualify for.
Review Your Budget
To get a rough idea of what you can afford, first get in touch with us and let us know about your priorities. The current market value of properties similar to your dream home will help determine the cost of buying a new home. You will also have to take repairs, renovations, insurance, mortgage down payments, closing costs, and similar expenses into account before you gain a rough estimate of how much you will need to have in your budget.
Get Pre Approved
Next, get Pre-Approved! Pre-approval is quick and painless but is an important step in buying a home. For pre-approval you need to meet a loan officer and fill out an application. By getting pre-approved, you will have the information about what you can afford and be able to plan accordingly. Another advantage of getting a pre-approval is that you are taken more seriously when you make an offer on a home. If you are pre-approved, lenders have more time to go over different loan programs with and you get you the best deal!
Consider All Variables
When you apply for a loan, the lenders will look at many variables before they qualify you for a loan. Frankly, you should be concerned about these factors more than the lender, because you will have to pay the mortgage and your property will be used as collateral. Apart from your income, savings, and total assets, you should be aware of:
- Your liabilities (auto loans, credit card debt, etc.)
- Your obligations (potential property taxes and insurance, home owner's association, etc.)
The Final Decision
Ultimately, what you can afford is determined by how much loan you can get and what you are comfortable with. If your credit score is great and you qualify for a large amount, but cannot afford to keep up with the mortgage payments due to your financial obligations, we advise you to re-evaluate your options. Although you should not have to compromise on the property you wish to acquire, you have to be realistic and go for a property you can afford.
How We Can Help
Talking to a loan officer early in the home buying process will save you time and money. They will:
- go over different loan options with you
- help fix any missing pieces in your loan application
- answer any questions you have
- guide you through the process