As you enter the world of real estate, funding for your next home purchase stands on the forefront of the homebuying process. Understanding what you can afford may help you in starting your journey to find your next abode.
To figure out your finances to determine how much home you can afford, consider these factors:
If you’d like to use a system to manage your finances, consider utilizing the 28/36 rule. With this method, you dedicate no more than 28 percent of your gross monthly income to household expenses such as utilities and mortgage payments. Your debt shouldn’t take over 36 percent of your gross income.
Using this system helps you manage debts and financial duties, and demonstrates to mortgage lenders you can afford a monthly mortgage payment.
Before starting the home buying journey, it’s ideal to consider your overall standing to make sure you’re ready to purchase a home.
Consider your credit score - a higher credit score may spell approval from more lenders and lower interest rates. Do you have adequate cash reserved to afford a down payment, closing costs and other fees associated with buying a home? By answering these questions you’ll get a better idea if homeownership is feasible in the near future.
Purchasing a home takes effort and much consideration, so take your time during the process and figure out your finances to jumpstart your journey.
I was born, raised, educated and have worked in the Treasure Valley my entire life. My family has been in the Real Estate business here for over 50 years. I make it a point to stay very familiar with real estate and property in all of the valley, as well as the backcountry and mountain areas. My special points of expertise are in Residential, Investments & Rental Properties, along with Farms and Land. With over 35 continuous years of sales experience, I have the tools to help you either sell your current real estate or purchase something new. My number one concern is your satisfaction and happiness with your entire real estate experience.