How much home price you can easily afford? To decide this price, you can always use a simple guideline that is known as the 36% rule.
You must add your total debt payments per month by adding your student loans, car loans, credit card payments, and also your projected mortgage, property taxes, and homeowners insurance. This sum should never exceed more than your income’s 36% by considering your pre-tax income.
Buying a home can always be exciting, but it should take care of your financial stability and security too. You cannot afford to live month after month with just an income to meet the only obligations like:
- Mortgage payments
- Debt payments.
It is always a nice idea to consult any mortgage expert like Jill Burgess while you seek any mortgages Greensboro to buy your home. Consider therefore the following few things while deciding about your mortgage loan:
1. How much down payment that you can easily afford
If you have enough savings with you then you can reduce your loan amount by paying the maximum part of your house cost as a down payment.
2. How much to save for buying a home
If you have targeted a certain price for your home then you must plan for necessary savings to make your down payment. For the remaining balance, you need to take a loan.
3. How much can you stretch
If you are comfortable with your saving and your current income then you can buy your home without stretching your budget. Otherwise, you need to find where you can compromise for buying your dream house.
4. Your credit score
While applying for your home loan it is very important that your credit score must be healthy. Every lender will check this before approving your loan.
5. Your lifestyle
You need to see after you are committing for your loan and the monthly installment then whether you can maintain your existing lifestyle.