A Home Of Your Own
Finding The Right Home
What Can You Afford?
Home Search Advice
Home Viewing Advice
Buying Your Home
Contract To Closing
What Can You Afford?
Want to know how much home can you afford? Review your income, savings, and existing debt to determine how much home you can afford.
How much home can you afford?
Once you have an idea of what you’re looking for, your next step is to determine how much home you can afford. A review of your income, savings, monthly expenses, and debt will be necessary.
As you begin this process, the most important step is to get pre-approved through a local, qualified mortgage lender.
Although, the lender / loan officer you choose has little impact on me and my role as your agent, but a bad loan officer can (and often will) make your life miserable. Poor loan officers are known to fail to communicate properly, give poor advice, and can actually jeopardize your ability to purchase a home by failing to be detail oriented or identifying potential issues early in the process. This is why it’s in your best interest to select a qualified, capable, and experienced loan officer (LO). I also highly recommend using someone local, who offices somewhere within the Des Moines Metro. All realtors have nightmare examples of buyers who’ve used a “national” lender with less than desirable results.
If you have a local loan officer you know and trust, then by all means let’s utilize that individual. However, if you do not know of a quality, local loan officer, simply speak to Ted Weaver and he can recommend one who he’s worked with in the past and has personal, first-hand knowledge of their capabilities.
Getting pre-approved early in the process enables you to move quickly when you find the right home, especially if there are other interested buyers. A pre-approval indicates to the seller you are serious and demonstrates your financial able to purchase the property. The pre-approval is a simple calculation that provides the amount you’re able to finance through a loan along with your monthly mortgage payment amount (both key pieces of information you should know prior to beginning your home search). And, it can usually be obtained in about 15 minutes either over the phone or through an online application process, depending on the lender.
The amount you can afford to pay for a home will depend on several factors, such as:
- Gross income
- The amount available for the down payment, closing costs as well as any cash reserves required by the lender
- Your current debt level
- Your credit history / credit score
- The type of mortgage you select (FHA, Conventional, USDA, VA, etc.)
- Current interest rates
Your debt to income (DTI) ratio and your credit score will typically play the biggest roles in determining your price range. Each buyer is unique and a mortgage professional will help you determine what is affordable within your existing budget.
If you do not have a trusted local loan officer, speak to Ted Weaver and he can recommend one who he’s worked with in the past and has personal, first-hand knowledge of their capabilities.