This is a great question! Figuring out what you can afford is a great way to start the home buying process. We at Bayer Home Loan Team at e Mortgage Management work closely with our clients to assist them in developing a personalized purchase budget before buying a home. There a few main factors that go into determining your home buying budget:
- Monthly Payment Goal – Determining a realistic monthly payment goal is a good way to start the process. This will allow you to shop with confidence that the homes you are looking for are within your monthly payment goal range.
- Down Payment: – How much are you comfortable with for cash out of pocket on the purchase of your home. Keeping in mind that cash out of pocket will include closing costs that are separate from your down payment. Determining how much cash you have available will help you to determine your budget.
- Qualification – Your income will play a major roll in determining the amount you are eligible to be approved for. Your loan officer will be able to give you an estimate on how much you can be approved for. We highly recommend getting a full Pre-Approval before setting a budget so you know what you can spend prior to shopping for a home. Click here to Learn more on how to get Pre-Approved for a Mortgage
A note of caution: There are many mortgage calculators online. Some are more accurate than others, but none of them are able to give you a personalized, accurate look at realistic mortgage payments. Only a licensed mortgage professional will be able to give you accurate payment estimates after taking a full application and looking at current market interest rates.