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 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. Down payments are an important component of financing your new home.
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 youll 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?
This is a question youll want to get answered before you begin your home search. This is something that we are here to help you with. 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 complete the form below or call us personally schedule an opportunity to meet in more detail about your goals and objectives. We look forward to helping you buy your dream home.