Are you thinking about buying a house? If so, do you have any idea how much you can afford to spend? Many people think they know how much they can afford, but when they start to crunch the numbers, they realize they should not spend as much on a home as they originally thought they could (or should).
The amount that a mortgage lender is willing to loan you depends on several pieces of information. Items taken into consideration include your income, your credit score, your current debt, your down payment, and other factors. You may get pre-qualified and pre-approved for a mortgage of a certain dollar amount, but you should feel comfortable with the dollar amount you ultimately spend. In other words, just because you are able to qualify for a million dollar mortgage, for example, does not mean you should spend a million dollars on a home.
You can’t predict the future, no matter how certain the present seems. You may currently have a very stable employment situation and very little debt. But it’s difficult, if not impossible, to know with one hundred percent certainty that your life’s situation will remain constant for the next 10, 20 or 30 years. If you commit to purchasing a home that is affordable – but just barely affordable – you may regret it a few years down the road if something unexpected occurs in your life. Therefore, it’s often advisable to purchase a home that is priced well within your comfort level – and not just barely within it.
Need Help Figuring out How Much House You Can Afford?
Several online tools can help you calculate the dollar amount that you should potentially spend on a home.
Mortgage Calculators: Use a free mortgage calculator to help you calculate how much your monthly mortgage payment will be for houses of different prices. Mortgage calculators ask you to enter the estimated value of the home, the estimated loan amount, the estimated mortgage interest rate, the length of the loan, the estimated property tax, and other information. The calculator is able to give you a good estimated monthly payment amount. This is the number you can use to help determine if the house is something you think you can afford.
How Much House Can I Afford Calculator: There are several free online “how much house can I afford” calculators that ask you to input information about your income, the estimated cost of the home that you wish to purchase, and your monthly expenses. Using your numbers, the calculator is able to tell you how much house you should be able to theoretically afford – barring any unexpected expenses in the future.
To learn more about determining how much house you can afford, give The Home Loan Arranger today at 1-877-938-7501!