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Understanding How Much Home You Can Afford

Monday, March 22, 2021   /   by Mitch Stein

Understanding How Much Home You Can Afford

How much home can you afford?

When you are buying a home, a lender will look at your income, assets, and how much you have for a down payment. They will also want to know about your financial liabilities and other financial obligations that you have. This includes credit cards, auto loans, child support, taxes, and insurance. All of these things will impact the size of the loan that you can afford.

All lenders are going to look at your debt to income ratio. This is a way for the lender to see if you will be able to manage your monthly payments. Acceptable debt to income ratios will vary by lender and loan program. Be sure to check with your lender about what ratio they use. Once you know this ratio, you can calculate the maximum monthly payment you'll be able to afford for the homes mortgage, insurance, and taxes. 

There are online mortgage calculators that can help you find what price of a home you can afford based on that information and current interest rates. If interest rates go down, your buying power increases. If interest rates go up, your buying power will go down. 

Ask your lender what information they need to determine the payment that you would qualify for. Always ask about what loan programs that may be available to you. 

A member of the Stein Team Realty can help you with all of your real estate needs. Please give us a call at 909-255-1070.

Mitchell Stein
License# 02081632
Stein Team Realty - Keller Williams College Park
Mitchell Stein Dre# 02081632
2440 W Arrow Route #5C
Upland, CA 91786
DRE# 01885348

Based on information from California Regional Multiple Listing Service, Inc. as of May 22, 2022. This information is for your personal, non-commercial use and may not be used for any purpose other than to identify prospective properties you may be interested in purchasing. Display of MLS data is usually deemed reliable but is NOT guaranteed accurate by the MLS. Buyers are responsible for verifying the accuracy of all information and should investigate the data themselves or retain appropriate professionals. Information from sources other than the Listing Agent may have been included in the MLS data. Unless otherwise specified in writing, Broker/Agent has not and will not verify any information obtained from other sources. The Broker/Agent providing the information contained herein may or may not have been the Listing and/or Selling Agent.
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