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It's Up to You to Decide How Much of a Mortgage You Want to Take On

By
Real Estate Agent with Keller Williams Capital Properties DC AB15253

Congratulations! You've decided you want to buy a home. What should you do first? What next?  Since I am a Realtor, I think that you should interview real estate agents as your first step to find that person who is going to guide you through the process.  Next is finding a lender to get you prequalified for a mortgage and give you guidance on how much that mortgage is going to cost you.  

The lender is going to tell you how much you can afford, based on your income and debts, credit history and credit score, and the current mortgage rates.  That's his job.  Probably the lender will approve you for a mortgage that is somewhere between 28 and 35% of you monthly income. (The more debt you have like credit card debt, car payments and student loans, the less of a mortgage the lender will approve you for.)     But.... Just because you can qualify for a certain mortgage amount doesn't mean that you need to spend that much.   (As your Realtor, I won't ever push you to overspend.) 

When applying for a home loan, it’s important to keep in mind how much monthly mortgage you feel comfortable paying.  Consider how your mortgage payment will fit in to your overall monthly expenses and family budget.   Look at your take home income and factor in not just the mortgage and utilities, taxes, and insurance, and then add in your monthly retirement savings contribution, payments to your emergency fund, your vacations, your treats like new clothes or dinners out, and anything else that you budget or plan for.   How much will you enjoy that new home when you need to eat Ramen noodles every night?

Particularly if this is your first home, it is a good idea to keep your mortgage payments to a manageable level - and you are the only one who can determine that!  If this sounds good, lets talk.  I would love to recommend some good lenders to you and I would be happy to explain the home buying process if you have any questions.  Please give me a call at 240-401-5577 or email me at lise@lisehowe.com

Contact me for more insights and info.

Comments (10)

Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Good morning, Lise... I often tell my clients that just because they can buy a very expensive house, doesn't mean they should.

Mar 20, 2023 05:41 AM
Brian England
Ambrose Realty Management LLC - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

I remember when I bought my home and I qualified for more than I thought my budget for a home should be, haha.

Mar 20, 2023 05:43 AM
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

Brian England - the lenders are just doing their job -but then it is up to the buyer to do their job! 

Mar 20, 2023 05:51 AM
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

Nina Hollander, Broker = I agree completely and I say the same thing to my clients!  have a great day - 

Mar 20, 2023 05:52 AM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Hello Lise - understanding step-taking is important in life so it make sense to using those skills in real estate as well.  A better understanding of the process can lead to a better experience (hopefully a smoother transaction too).  

Mar 20, 2023 05:55 AM
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

Michael Jacobs - and that is why we are here - to help the buyers understand their options 

Mar 20, 2023 06:06 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Lise, when a buyer is about to get approved, I always tell them there are two ways to look at that.   The bank will say how much you can qualify for, but your bank account will say something else.

Mar 20, 2023 06:11 AM
Bill Salvatore - East Valley
Arizona Elite Properties - Chandler, AZ
Realtor - 602-999-0952 / em: golfArizona@cox.net

Thank you for the great information in your blog today to share with us here on the Rain.  Make it a terrific day! bill

Mar 20, 2023 06:12 AM
Kathy Streib
Cypress, TX
Home Stager/Redesign

Great advice, Lise. The excitement of owning a home, especially, your first one, can make some people forget the other expenses that go with owning a home. My first recommendation is always to call an agent first. They will be able to guide you in the right direction. 

Mar 20, 2023 04:45 PM
Kristin Johnston - REALTOR®
RE/MAX Platinum - Waukesha, WI
Giving Back With Each Home Sold!

Great post!  Thanks for sharing and enjoy your day!

Mar 23, 2023 07:48 AM