Find Out How Much House You Can Afford!
To get an idea of how much house you can afford, we recommend that you consider the following factors* (Income, Funds Available, Debt and Expenses, Credit Profile) and use the 36% Rule.
These factors are considered by lenders when approving your loan and can give you a preliminary perspective on how much house you can afford.
Obviously, everyone’s situation is unique, and there are other factors such as family situation and size, risk aversion, and job situation that you may need to consider as well.
For now, using the 36% Rule however, your monthly mortgage expenses and other debt payments should not exceed 36% of your gross monthly income.
For example, if you earn $7,500 a month and have $700 in existing debt payments, your monthly mortgage payment for your new home should not exceed $2,000.
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If you would like to explore how much home you can afford or get started on your homeownership adventure click the Start The Process button below or call us at 469-645-8906.
* Definition of Factors to be considered when determining how much house you can afford.
Income – Money that you receive on a regular basis, such as your salary or income from investments. Your income helps establish a baseline for what you can afford to pay every month.
Funds Available – This is the amount of cash you have available to put down and to cover closing costs. You can use your savings, investments or other sources.
Debt and Expenses – It is important to take into consideration other monthly obligations you may have, such as credit cards, car payments, student loans, groceries, utilities, insurance, etc.
Credit Profile – Your credit score and the amount of debt you owe influence a lender’s view of you as a borrower. Those factors will help determine how much money you can borrow and what interest rate you will be charged.