How much can you afford?

Deciding how much house you can afford is a personal decision. Many factors come into play. How much can I borrow?  How much can I put toward my down payment?  What size monthly payment can I afford? 

There are no black and white answers to these questions.  Its a matter of give and take.  If you plan on a 30 year mortgage, you can probably make a lower down payment (or perhaps no down payment at all) and still manage the monthly payments.  If, on the other hand, you plan on a 15 year mortgage, youll probably want to make a larger down payment to keep your monthly payments in line with what you can afford.   

How large a down payment can I make?

Many buyers look at their cash on hand as their only source for their down payment.  This simply is not the case.  One way to fund or partially fund a down payment is by using a gift.   Parents, grandparents and other family members are often eager to help by making a cash gift toward the purchase of your home.   

There are also down payment assistance charities that can help you.  And, of course, if you are selling a home, the equity you've built up can be applied to your down payment. 

But these are not your only options.  We can help you explore all your down payment options, including low down payment and 100% mortgage financing options that might be right for you.   

What size monthly payment can I afford?

When determining what size monthly payment you can afford, youll want to consider what other monthly expenses you have.   Tangible expenses such as car payments, day care and utility bills, all play a role in how large a monthly payment you can afford.   

There are also the intangible expenses or lifestyle expenses that youll want to consider.  Things such as dining out, travel and when you buy your next car can effect how much you can afford.  Are you willing to curtail or delay some of these expenses in order to afford a larger monthly payment?   

How much can I borrow?

This is a question you'll want to get answered before you begin your home search. This is something that we are here to help you with.

We can answer any questions you may have about the mortgage process.  But the best way we can help is by getting you pre-qualified for a mortgage loan. We look forward to helping you buy your dream home. 

Verifying Your Down Payment,
Closing Costs, Assets, Income and Debts

A critical step in the mortgage loan application process is to verify the sources for your down payment, closing costs and assets, as well as documenting income and debts. The lender uses this step to determine your qualifications as a borrower. 

Down Payment & Closing Costs

Documenting that the down payment comes from your savings and that you will have savings and/or assets over and above the down payment gives the lender confidence in your strength as a borrower and your ability to repay the loan.

Take extra care to document the sources for any monies to be used for the down payment or closing costs.

Acceptable Down Payment & Closing Costs Sources

Assets

Collect information about your personal assets that add to your net worth and help to prove your credit worthiness.

 Common Assets Considered in a Mortgage Loan Application

·         Stocks, bonds, mutual funds, 401(K) and retirement accounts

·         Life insurance

·         Personal property estimate - cars, boats, antiques, jewelry, etc.

·         Other real estate or property

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