It’s important when beginning a search for a new home, that you have a good idea of where you are at financially. Although, there are many variables and factors to consider when deciding how much house you can afford, there are some basic guidelines that may be helpful:
- One of the first steps is determining how much money you are bringing in. This number would be your gross monthly income.
- The second number you will need to calculate is any debt you may have, such as credit cards, school loans, car loans etc. Also include any other monthly obligations such as alimony or child support.
- You will also want to calculate taxes and insurance rates for the property you are considering purchasing. Check out the city websites, for any tax rates. Also, insurance companies will often times do a free quote for you specific to a property.
Generally speaking, it’s a good idea to not exceed 28% of your gross monthly income for housing expense (including taxes and insurance). There are many home loan calculators available online that will help you get a better idea of what you can afford. Keep in mind, these numbers are just an estimate, and every situation is different. Even better, let us get you in touch with one of our mortgage experts and let them work the numbers for you! Contact us today!
Brenda Blaser, Realtor