How Much House Can I Afford?
How much house can I afford is usually the first question people ask themselves when they start searching for homes in Urbandale.
Our free mortgage calculator is a great way figure out how much house you can afford by adjusting either the purchase price or amount of your down payment to see how that affects your monthly payments. Enter in different amounts until you get to a monthly payment you will feel comfortable paying, and this will give you a ballpark for how much house you can a
A Few Factors That Affect How Much House You Can Afford Are:
1. These 3 Additional Items Should Be Considered When Figuring Out Your Monthly Budget
Everyone always thinks about their monthly mortgage payment, but forget to include things like taxes, mortgage insurance, and homeowner’s insurance.
Also, another factor to consider is how much of a down payment you will be putting towards your mortgage.
This affects your monthly payments not only because the more you put down the less your monthly payments could be. That is pretty simple and straightforward. But other things like mortgage insurance is tied the amount you put down as well. Mortgage insurance could raise your monthly payment.
If you put down less than 20%, you will more than likely need to pay for mortgage insurance unless you qualify for a VA loan.
What this means for you, the borrower, is that if you have a larger down payment, and are comfortable with larger monthly payments, you could afford a more expensive house.
But if you don’t have as much for a down payment, or aren’t comfortable with larger monthly payments, you will need to purchase a less expensive home. In either case, you will need to be approved for the mortgage. Getting approved is based on many different factors. They could include your credit, job history, and debt-to-income ratio which we will cover next.
2. What Is Your Debt-To-Income Ratio?
Another thing to remember is to get approved for a mortgage, there are factors underwriters will look at such as your credit profile and debt to income. That’s why before you go out and look at a bunch of houses in different price ranges, its best to get pre-approved so you know how much house you can afford and be approved for.
Different types of mortgages require your debt to income to be within different limits. So, figuring out if the additional monthly payment for the mortgage will bring your debt to income higher than the approved range is important before you spend too much time and effort looking at homes.
3. Do You Qualify For A FHA Or VA Mortgage? Can You Utilize A Down Payment Assistance Program To Help You Afford A New House?
Many people think you HAVE to have 20% down to get approved for a mortgage. There are many types of mortgages that don’t require this, especially for first time homebuyers. FHA loans allow the borrower to only put 3.5% down.
However, this will make your monthly payment higher because you are putting less down. Also you will need to have mortgage insurance which I explained earlier.
I teach in detail about all of these different loan types in my educational videos on my website.
As you can see there are many different things that affect how much house you can afford to purchase. To get a solid idea, it is best to get pre-approved. This way you know how much your monthly payment will be and how much home you can get approved for.
To get pre-approved is a simple process. My team and I keep it simple and you can start by answering a few questions here. You can also send me an email at lwickett@gohomeside.com
You can also call/text me anytime to get the process started 515-238-9949
Different types of mortgages require your debt to income to be within different limits. So, figuring out if the additional monthly payment for the mortgage will bring your debt to income higher than the approved range is important before you spend too much time and effort looking at homes.