How much house can you afford? If you’re thinking about buying a home, then this is a question that’s on your mind. The first thing to consider when figuring out the answer to this question is how much money do you have for the down payment and closing costs.
How much money do you have for the down payment and closing costs? The minimum down payment is generally 20 percent of the purchase price. Depending on your credit score, you may be able to put as little as 3-5% (or no money at all) down.
Next, what type of loan are you applying for (30-year fixed mortgage, 15-year fixed mortgage)? Lastly, what’s your annual income? With all these pieces of information in place, it will be easier to figure out an affordable range. We’ll help with the math!
Tips to determine how much house you can afford:
- Determine how much money you can afford to spend on a house
- Find out what the mortgage payment would be for that amount of money
- Figure out your monthly income and expenses
- Add up all your debts, including car loans and credit card balances
- Decide if you want to get a home equity line of credit or pay off your debt first
- Calculate how much more mortgage you can afford with an additional $50/month in payments
If you’re wondering how much house you can afford, it’s important to consider a few factors before deciding on an answer. The first thing to do is evaluate your monthly income and expenses; this will help determine what kind of mortgage payments you can comfortably pay each month. Then take into account the size of home that meets your needs in terms of space and amenities–and remember not to go for more than two times as big as necessary! You’ll also need to decide if buying or renting makes sense given your financial situation, personal preferences, future plans (i.e. pets, larger family, etc.); we recommend checking out our blog post about mortgages. Whether you choose to buy or rent, be sure to get pre-approved so that you won’t miss out on the home of your dreams.
If you have questions about home buying or selling, be sure to contact one of our expert agents today.