How Much Home Can I Afford? 4 Easy Steps To Determine How Much You Can Afford – MortgageWorks

How Much Home Can I Afford? 4 Easy Steps To Determine How Much You Can Afford – MortgageWorks

So you’re ready to buy a house but how do you figure out how much you can afford well today on mortgage works we’re going to talk about the four simple steps that you can take to determine how much home you can qualify for or not qualify for welcome back to mortgage works i’m art alvarez where we have the answers and they’re on the house you’re ready to buy

A house but you may want to develop your own notion about how much you can afford you don’t want to get out there and start looking for a home that may be out of your price range at the same time you want to make sure that you’re buying a home that’s going to suit your needs and to do this i’m going to show you four simple steps first thing to determine is what

Your income is now that should be fairly simple for some people if you’re on a salary you know what your gross salary is if you’re on an hourly rate you should be able to determine how much your monthly income is based on how many hours per week you work if you have variable income components that’s a little tricky because there are some rules in terms of how that

Income is going to be calculated but that is the first step figure out what your monthly income is from your job or other acceptable sources such as social security retirement income and so forth the second thing to determine is what your consumer monthly debt obligations and by that i mean primarily credit cards installment loans car loans student loans things

Of that nature we don’t count things like your you know your cell phone bill or utilities and those kinds of expenses and the third step is what’s the monthly mortgage expense going to be for the home you want to buy well you may not really know that answer yet but what you think you know and you should know is what the monthly amount is that you’re going to be

Comfortable with so you want to use that figure as part of these four steps now the fourth step is we’re going to calculate a ratio a debt ratio so what do you do you take your monthly consumer debt obligations from again your credit cards your car payments your installment loans you add to that the monthly housing expense that you are comfortable with that’s going

To include principal and interest property taxes homeowners insurance and hoa dues if applicable so you’re going to take that monthly housing expense you’re comfortable with add your monthly consumer data obligations divide that into your monthly income and you’re going to come up with a result a ratio if that total debt ratio is somewhere between 33 to 38 percent

You would be deemed well qualified and that mortgage payment that you desire should be comfortable for you at least on paper but that’s where we can come in because we can after you’ve determined those general parameters to help you get started on the process we can help you fine-tune that and get more specific as to maximum loan amount purchase price so that you’re

Better equipped to go out there and in a well-informed way go after houses and make offers at a price level you’re going to be comfortable with and that we’ve helped you determine you can qualify for now after giving you these four steps so that you can on your own calculate in a rudimentary way how much you can qualify for the big question is that monthly housing

Expense that you determine you’re comfortable with is that realistic well that’s where we can come in our information is here on the screen give us a call our job will be to break down that monthly housing expense figure that you say you’re comfortable with and translate that into an actual specific loan amount that you would be qualified for that of course will

Also determine what the maximum purchase price is that you can go after so give us a call we’re happy to help we do this every day that’s mortgage works i’m art alvarez where we have the answers and they’re on the house

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How Much Home Can I Afford? 4 Easy Steps To Determine How Much You Can Afford – MortgageWorks By MortgageWorks