Most Common Question from First-Time Homebuyers

“How much can I afford?”

Answer: As you begin to shop for a home, knowing how much house you can afford is a critical first step. First, meet with a reputable lender who will discuss your financial situation and pre-qualify you for a home loan. Determining how much home you can afford means figuring out what size mortgage a lender will qualify you for. To calculate this number, lenders evaluate things such as:

• income
• credit rating and likelihood of repayment
• size of down
• term of loan
• outstanding debts
• interest rate
• time on job

A good mortgage lender will also ask about your objectives and goals for a monthly payment, which may be different (higher or lower) than the max. ratios allow. It is important that the monthly payment be in the range where you (as a borrower) feel comfortable; after all, you will be making that payment for as long as you have that mortgage. Understanding the financial obligation of buying a home for the first time can be overwhelming, but a good strategy session or two up-front and early on in the process with a lender you trust can help instill confidence in the overall loan-buying process.

Agents: Make sure your buyers have the “BEST” resources available to them to answer ALL their lending questions with knowledgeable answers. A quick 10-minute conversation with me can lay many of their fears to rest. I can help them understand the basic elements of financing and review the goals they have in mind for home ownership, giving them (and you) the freedom and confidence to purchase that dream home!

My team and I are here to assist with your questions, pre-quals and pre-approvals. We also love saving the day, and we do it well – give us a call if you have a loan in jeopardy.