First-time homebuyers,

Before you start touring homes for sale, it's important to start off with a budget so ...

you know how much you can afford to spend on a home.

Knowing what mortgage payment you can handle will also help you narrow the field so you don't waste precious time touring homes that are out of your reach.

Where to begin

The key factor in figuring how much home you can afford is your debt-to-income ratio. This is the figure lenders use to determine how much mortgage debt you can handle, and thus the maximum loan amount you will be offered. The ratio is based on how much personal debt you are carrying in relation to how much you earn, and it's expressed as a percentage.

The ideal ratio

Mortgage lenders generally use a ratio of 36 percent as the guideline for how high your debt-to-income ratio should be. A ratio above 36 percent is seen as risky, and the lender will likely either deny the loan or charge a higher interest rate. Another good guideline is that no more than 28 percent of your gross monthly income goes to housing expenses

 -------------------------------------------------------------------------------------------

Call me today If I can help with your home buying needs in Greater Phoenix or Scottsdale

Jason Mitchell

734.637.2731

Jason C Mitchell PLLC

www.mitchellgroupaz.com

 

 

0 Comments on How Much Home Can you Afford ?
What does the graphic say?
Leave a response…

(optional)
Spam Prevention:
 
Photo_3

Jason Mitchell

Scottsdale, AZ

More about me…

Realty Executives

Office Phone: (888) 648-2415

Cell Phone: (480) 540-8591

Email Me



Links

Archives

RSS 2.0 Feed for this blog