First Time Torrance Home Buyers Tips – How Much Home You Can Afford
It is pretty standard for first time home buyers to be pretty unsure about the financial aspects of buying a home. They often have many questions about the process and steps in the process. How much can I afford? Do I need a large down payment? See other first time home buyer tips and advice here.
The home you can afford can be determined by your income, credit history, the cash you have for a down payment and closing costs, and your debt. How much you earn compared to how much you owe will likely determine how much the bank allows you to borrow.
The financial rule of thumb is: your total monthly debt service, which will include your monthly mortgage, shouldn’t be more than about 36 percent of your gross monthly income (check with a lender as this changes somewhat due to a number of factors) . Most experts say that your monthly housing expense, including taxes and insurance, should not exceed about 28 percent of your gross monthly income.
Naturally, every situation is different, and each lender has different rules about working with buyers. A number of choices within
your control can affect your monthly payment as well. For example, you might choose an adjustable rate loan, which has a lower initial payment than a fixed rate program. Similarly, a larger down payment may lower your monthly payment.
If you’d like more information about how much home you can afford, please call or email. I can help you get the mortgage information
- Why Buy a home instead of renting
- Where to search and how to find current listings
- Considering a move? Steps to take
- How to Look for Foreclosures?
- The home search. Choosing your home
- Homebuyer tips
- The home search. Finding out how much you can afford
- The pre-qualification process
- The difference between getting pre-qualified and pre-approved
- Down payments
- What does your mortgage pay for: PITI
- The loan process
- Understanding Closing Costs
- Homeowners Insurance
- How Interest Rates Will Impact You