| First
Time Home Buyers Tips - How Much Home You Can Afford
First-time buyers are often unsure about the financial aspects
of buying a home, and you may have many questions swirling
in your head. How much can I afford? Do I need a large down
payment?
Your home
price range will be determined by your income, credit history,
the cash you have for a down payment and closing costs, and
your debt. How much you earn compared to how much you owe
will likely determine how much the bank allows you to borrow.
The financial
rule of thumb is: your total monthly debt service, which will
include your monthly mortgage, shouldn't be more than about
36 percent of your gross monthly income. Most experts say
that your monthly housing expense, including taxes and insurance,
should not exceed about 28 percent of your gross monthly income.
Naturally,
every situation is different, and each lender has different
rules about working with buyers. A number of choices within
your control can affect your monthly payment as well. For
example, you might choose an adjustable rate loan, which has
a lower initial payment than a fixed rate program. Similarly,
a larger down payment may lower your monthly payment.
If you'd
like more information about how much home you can afford,
please call or email. I can help you get the mortgage information
you need.
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