How Much Home Can You Afford?
Your search for the perfect home begins with its’ affordability. The amount of your salary is the largest factor that may come in to play. “The general rule of thumb is that you can purchase a home that costs two or three times your annual salary," says Harrine Freeman, a financial expert and the owner of H.E. Freeman Enterprises.
You can also find simple guidance in the 28/36 rule where your housing payment (mortgage, insurance, and taxes) should not be more than 28% of your monthly income (gross) and your debt to income ratio should be less than 36%. Your debt to income ratio is the comparison of how much you owe towards recurring monthly obligations, such as credit cards, loans….etc., in relation to how much you make in income.
Once you are in knowledge of your standing, as well as how much of a down payment you intend on putting down, you can figure out the maximum monthly mortgage payment you can afford. See our Simple Payment Calendar on the right side of our home page.
You are one giant step closer to finding the home that is perfect for you! With a proper understanding of your buying position you are ready to search the market! Contact our offices and any one of our brilliant agents that are poised and ready to answer all of your questions along the way and guide you into optimizing your position as a strong buyer in today’s market!