Before you fall in love with the house, be sure to fall in
love with the numbers. If you are considering purchasing a new home, it is
important to connect with an independent mortgage broker to walk through your
home financing options.
There is much more that goes into the cost of home ownership than simply the
price of the home. Other factors include property tax, homeowners’ insurance,
and the interest rate on the home loan.
Preparing a thorough and comprehensive budget is a good
first step to understanding how much house you can afford. Keep reading
below for more details on creating a budget!
Please, DO NOT start with a "Payment Calculator",
you want to use an "Affordability Calculator" that starts with
MONTHLY HOUSEHOLD INCOME (gross income)
fyi: when lenders underwriters calculate your income;
they use gross W2 income – net income for self-employment income.
If you want help calculating your income - Call me right
away
Lisa @ 818-359-4145
Visit: Trustlendingsolutions.com,
email Lisa direct at Lisa@trustlendingsolutions.com
AFFORDIBILITY CALCULATOR will look like this:
Monthly Household Income *
Please enter a number between 100 and 999999
Loan Term, i.e., 30 year = 360 months
Interest Rate, i.e., 5.000%
More Options
Calculate
You may be able to afford a house up to:
$0
with an estimated monthly payment of $ 0. Based on your income, a house at this
price should fit comfortably within your budget.
How to calculate your monthly budget
Ready to crunch some numbers? Start with listing all your monthly financial
obligations such as your car payment, credit card debt, utilities, and more. Be
sure to add funds for emergencies, savings, and unexpected expenses. Figure out
your budget — Determine all your sources of income and calculate what they add
up to each month. Remember to include revenue from alimony, investment profits,
rental earnings, and if you have a co-buyer, their income, and assets as well.
Factor in additional home costs — List all other housing-related costs such as
property tax, homeowners’ insurance, estimated mortgage interest rate, and the
loan term (the number of months you will have to repay the loan).
Include additional living expenses — Add up all your other monthly expenses.
Since some of these costs can fluctuate from month to month, it is a good idea
to estimate on the higher side, so you will not be caught short. These include
things like car payments, groceries, utilities, etc.
How to get the best interest rate
Getting the best possible interest rate can save you thousands of dollars over
the life of your home loan.
A higher credit score typically means a lower interest
rate. Talk to your independent mortgage broker about the steps you can take in
advance to make your application more attractive to lenders who are making the
decision on your credit worthiness once you are ready.
Increase your credit score — Do you know your current credit
score? If not, you can request one free copy per year from each of the three
major credit reporting agencies: Equifax, Experian, and TransUnion.
A 640 FICO score will typically qualify you for a home loan,
but the most competitive rates will go to borrowers with FICO scores in the
high 700s and 800s. You can increase your credit score by always making
payments on time.
Pay off debt — Lenders like to see low levels of debt. It is unrealistic to
think a borrower will have zero debt, but a lower amount shows that you can
manage your debt responsibly.
Make the largest down payment you can afford — The less money you need to
borrow for the purchase of your home, the better. For younger people and
first-time home buyers, saving for a big down payment is not always easy, but
there are programs that make it easier with lower down payment requirements. An
independent mortgage broker can discuss government programs and loan options
with you.
Looking for home financing?
Let
us get started today! Looking forward to speaking with you about how we can
work together to make your home buying dreams come true!
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